Madoff trustee sues SEC’s top lawyer

The top attorney at the Securities and Exchange Commission is being sued over allegations that his family’s estate wrongfully received more than $1.5 million in phony profits from Bernard L. Madoff’s massive fraud.

The lawsuit, filed by Madoff trustee Irving Picard, targets David Becker, the SEC’s departing general counsel, along with his brothers William and Daniel Becker. All three are coexecutors of the estate of their mother, Dorothy Becker, who died in June 2004.

According to the lawsuit filed in federal court in New York, the Becker estate received more than $2 million since Dec. 11, 2002, from Bernard L. Madoff Investment Securities.

“The trustee’s investigation has revealed that $1,544,494 of this amount was fictitious profit from the Ponzi scheme,” the suit says. “Accordingly, defendants have received $1,544,494 of other people’s money.”

Picard’s suit seeks to recover that money from the Beckers to return it to wronged Madoff investors.

Madoff was arrested in December 2008 after admitting that he ran a decades-long, multibillion-dollar swindle, considered the biggest investment fraud in history.

SEC spokesman John Nester said Wednesday that David Becker was unaware of his parents’ investments with Madoff.

“He was not involved in his parents’ financial affairs, and has no recollections of his parents’ investment with Madoff prior to his mother’s death and the subsequent liquidation of the account,” Nester said in a statement.

Becker is preparing to leave the SEC at the end of this month and return to private practice. He became general counsel in February 2009 and has served as a policy advisor to Chairwoman Mary Schapiro on most of the agency’s major policy and regulatory initiatives.

He also served as the SEC’s general counsel under past Chairmen Harvey Pitt and Arthur Levitt.