PJM Exclusive: Congress Questions SEC Chief's Involvement in New Madoff Scandal

Originally, the SEC was widely criticized as incompetent in uncovering the Madoff scandal. An SEC inspector general report said the agency overlooked "more than ample" evidence that red-flagged a possible Ponzi scheme. In her confirmation hearings, Schapiro vowed to “reinvigorate SEC enforcement efforts in the wake of the Bernard Madoff investment scandal."

Issa and Grassley say the case exposes multiple ethical lapses within the agency. They charge that while Schapiro knew Becker had received money from a Madoff account, it appears she never ordered Becker to determine his family's possible “clawback” liability in the Madoff bankruptcy case. They ask the SEC chief why she apparently did not ask Becker whether the advice he was providing might affect his personal financial interest. Also troubling, an SEC ethics counsel reportedly gave Becker a waiver request 25 minutes after Becker made it. The SEC official, William Lenox, reportedly accepted Becker’s incorrect assertion that the work would not affect his financial interest.

It also has been reported that Becker’s financial interest and conflicts were not disclosed to the Commission’s inspector general or to the public until Becker was sued by Picard in the Madoff bankruptcy case.

Becker did ask for a waiver to continue representing the case, "but did not fully disclose his financial interest to the ethics office," a congressional aide told Pajamas Media.

Becker left the SEC in late February.

The SEC has until March 7 to reply to the lawmakers.