And if you think that the SEC can be influenced by a $1.5 million dollar investment, you might want to check your backyard for Martian tracks.
Mr. Picard’s latest effort at headline grabbing is a lawsuit against David Becker, the SEC’s General Counsel (yes that SEC) for “profits” Mr. Becker’s parents made in connection with investments from Madoff funds. According to various news reports, Mr. Becker made approximately $1.5 million as an executor of his parents’ estate with his brother. First, it is hokum, complete nonsense, to believe the SEC was somehow diverted from the Madoff trail because Mr. Becker influenced the process to protect his family’s investments. Mr. Becker is a longstanding public servant who has served his country with great distinction and honesty. And if you think that the SEC can be influenced by a $1.5 million dollar investment, you might want to check your backyard for Martian tracks.
Second, the importance of this story is Mr. Picard’s continued assault on what I would characterize as innocent investors. These are folks who were not in the Madoff inner circle and had no basis to believe there was a fraud. In my humble opinion they should be able to keep their money. To claw back funds years later, Mr. Picard must show some level of fraudulent conduct or knowledge. I applaud Mr. Picard’s suit against JPMorgan Chase because if he is right, they “knew” of the fraud and drove the getaway car; or in this case, a fleet of armored cars. A predicate to every suit brought by the trustee must be knowledge and fraudulent intent.
Indeed, if we adopt Mr. Picard’s definition of profit (taking out more than you put in), we might as well try to clawback his firm’s fee, which now stands at a cool $128 million. Hasn’t he “profited” from the Madoff fraud? You bet; maybe its time for Mr. Picard to look in the mirror.