Standoff on whether Stanford victims will be reimbursed reveals rift in SEC

The Securities Investor Protection Corporation continues to hold off on ruling whether or not those who lost money in the $7 billion ponzi scheme allegedly perpetrated by Texas financier Robert Allen Stanford will be reimbursed up to $500,000 per claim. In the meantime, a recent report by the Securities and Exchange Commission’s inspector general reveals a potential conflict of interest in the matter involving the commission’s former general counsel and senior policy director, David Becker. The report says Becker supported reimbursing victims of Bernard Madoff’s ponzi scheme, but not Stanford victims. Becker was involved in the SEC’s case to liquidate Madoff’s investment firm under the Securities Investor Protection Act, a 1970s law establishing an industry-funded insurance program for investors who lost money through broker fraud. “Becker, it was later reported, had inherited some ‘fictitious profits’ from a Madoff account that had belonged to his mother and that was liquidated after her death,” reads a recent article in the Houston Chronicle on the report. Read the article here. SIPC had said in July it would have a decision on reimbursement made around Sept. 15; on Sept. 16 it released a brief statement saying a decision had not been reached, but would be “with all deliberate speed.” Stanford was sued by the SEC and indicted on federal criminal charges in 2009. He has denied any wrongdoing while awaiting a trial, scheduled for next year, in federal custody.