just let you know that your written statement will be made a part of the record and you're recognized for five minutes to summarize your testimony thank you very much mister chairman chairman neubauer ranking member capuano chairman appreciate the opportunity to testify before you and i thank you for listening to me i welcome all your question i'm eager for them because for the past six months there have been many incomplete misleading or just plain false things written about me and i'm eager to answer any and all questions put this matter to rest once and for all at all times during my service at the securities and exchange commission my abiding goal was to advise the commission as to the course that provided the greatest benefit to investors and that was consistent with the law i'm confident that any fair review of my actions will demonstrate that this was the only motivating principle behind them such a fair review has not yet been forthcoming in some i was informed by the sec ethics office that i had no conflict of interest in the madoff liquidation and that there was no appearance of such a conflict i did precisely what i was supposed to do i identified a matter that required legal advice from the scc's ethics office as was my usual practice i almost never started a new matter without getting clearance from the ethics office i saw that advice because i firmly believe that no one should be the sole judge of the ethics of his own actions i followed the advice of the ethics office completely the office of inspector general report contains no findings to the contrary indeed the report confirms that i disclose the existence of my deceased mother madoff account to at least seven people at the sec including my boss chairman schapiro i took no steps to conceal the existence of that inheritance the apparent recommendation of the office of government ethics that this matter be reviewed to refer to the department of justice is upon review of the office of government ethics less than it seems the recommendation stems from the fact that o precluded by law from making any determination that the criminal conflicts of interest laws may or may not have been violated and here i'm quoting from their letter a sentence that appears in a footnote in the next to last page of a hundred and eighteen page report and in fact the office of government ethics expressed no opinion on that issue i came back to the sec because i care deeply about the agency and its people because my friend mary schapiro asked me to because i thought it was my duty i knew the sec was in crisis and in need of revitalization and reform i was flattered a chairman schapiro thought i could help and i thought so too while i had enormous affection for the sec my years of sec service and of representing clients before the agency had given me a clear eyed view of its shortcomings and of the measures that might be taken to revitalize it i still care deeply about the sec and i've seen firsthand how the process i've been through over the last six months arms the agency and the public interest this has been a dreadful experience for me in ways that there's no need for me to detail here i am extremely depressed and very sad that this has been a dreadful experience for my friend mary schapiro and the sec as well and i fear that this process this has been very damaging to the public interests in ways that just cannot be a parent to the subcommittee's and so i thought i would comment a little bit about that and i'm going to comment about that simply by repeating what i said to commission members and the staff about this very point when i took my leave of the sec last februari and i quote from my remarks here from the day i walked in the door two years ago until today i've been asked how this time around is different than the previous time the answer is that it's a hell of a lot harder in some ways we've made it harder on ourselves in others we live with constraints not of our own making and in other ways we just live in times that are much meaner than they were ten years ago it's riskier to work here than it used to be as you may know i'm having some experience with this myself unfortunately too many people have experienced those risks firsthand this time around i've had more than a few people in my office weeping with fear about what might happen to them because one person or another was looking into their behavior i've been shocked by that that shouldn't be is a symptom of the times and a political culture that is quite frankly seriously nuts to some extent this enrages me but mostly it makes me very sad i'm sad for the agency and for my friends and i feel terrible that i haven't been able to help people more and it is the biggest source the source of my biggest worry for the commission as i leave when i left here in two thousand and two i worried a bit that the agency might be too complacent i have the opposite worry today i worry that all the risk that people run will make the institution gunshot it's only natural but i hope i'm wrong i hope people here have the capacity to listen to the agency's critics be intensely self critical keep an open mind to a better way to do things and in the end never ever back off from doing what we believe to be right no one should take imprudent risks and we shouldn't sugarcoat what may befall the best intention of us but in the final analysis we can't live scared in the end what has made this agency great is people who say the hell with it i'm going to do what's right knowing that we are imperfect beings who often can't know what's right and knowing that the risks are real that will be we will be called to account for our failures or for our successes or just for being here it is so important that people here bring cases drop cases adopt rules walk away from rules solely on the basis of what is best for the people we serve the people in this room believe that i know that's why i love you all and why the privilege of having been with you for a time leaves me deeply in your debt i spoke from the heart when i said those words i'll speak from the heart today i welcome your questions thank you  up you made a couple points and i want to go back that it that you came to the to the sec for the the second time at the request of the chairman and you would good intentions which would you say that that was correct i would say they were good intention gif yeah and but i think one of the things we have to differentiate here is some good intentions and good judgment don't always coincide would you agree with that oh i it as a general proposition sure i agree with that so i think that the point where were this hearing about today is about you know people using good judgment because as you know and you've been around the sec for a number of years you concerned about is someone with your intelligence and your background and your reputation coming into the agency in and at a time when they were you know obviously under a lot of scrutiny very high profile case they had they missed it they screwed up and so you come in mary's brought you in and you obviously have some financial interest  or consequence or benefit from the outcome of some of the distributions to the victims of love this because i believe if these numbers are correct i believe it's your testimony is it your i guess your dad or your mom put about five hundred thousand and the mat off and in your cash today at about two million is are those clothes numbers or  h those are numbers that i first heard of in late februari of this year when i arrived at the sec all i knew is that  in some time before my father died my father died in two thousand and he had opened an account of my mother's name i didn't learn directly that my father had opened but my mother was a social worker and academic and she didn't do any  investment i didn't know what he put in but but i didn't know when you put in but but the question is are those are those are those are fairly accurate numbers i no actually i don't think so for five hundred thousand dollars and that when my brother in acting in a representative capacity for my mother's estate liquidated it there to there were about two million dollars in the account that came to me was much much less than that cuz what i got from my mother's will came after estate taxes were paid the money went to everybody else designated in the world so i have my share and i think i don't remember what the number of work well a little is no much much less than that so shoulder you you're familiar with the the concept of net equity si ya and what is that net net equity is a statutory term in the securities investors protection act that determines how a customer's claim that is how much is paid out to the customer of customers who have open accounts at the bankruptcy how much they get and and so basically if i understand equity of had an informal agreement with zipper that that the the number that they would use the net equity position shortly after they got there you are arguing that they should consider the constant dollar approach and  so my question is is if you use those two methods and you assume that the trustee is successful in his lawsuit against you and your state or what however they're bringing that would those two methods have a different impact on you well let me this so much sort of thrown into a basket in your question limit let me see if i can take i don't have a lot of that i'm and so you're going to have to be but i mean the interview yes or no yes that there would be different calculator i i i can't give you yes or no because they're all sorts of premises in your question about what the sec agreed to that just aren't actually atlas let's don't talk about what's agreed to let us talk about using those two methods would the different there be a difference in the amount of settlement that that you would have a width be based on what you just told me well it would be about a million and a half dollars so no i don't think i told you that i think i told you that that's what the trustee is claimed and i think that that the numbers that the trustees using it just wrong but i i knew none of this at the time yeah you should you have known that no i don't think so i on and and i don't know i did not even know at the time that this was knowable and show your your your defense of all of this is that you went to the ethics officer he said i'm not have a conflict and he said you're fine i just came everything i knew and i said tell me what to do and he said you should participate in this so if i'm a entity or a broker or dealer or something that the sec is investigating and i make a trade that you find fault with but  defense is that i ask my supervisor if i could make that trade they said it was alright and so i'm vindicated is i i well in in most individual cases i'd say that's right certainly when it's advice of coun absolutely i've had many cases like it doesn't keep you if it but if i break them broken the law that just because somebody more organization thought it was alright that doesn't that doesn't that doesn't change my guilt as well but the notion of knowledge is in this in the case of this particular law is included in the law it is what an employee to nose does to his knowledge and it the employee has to know that there is a direct and predictable financial effect on his financial interests by virtue of the action that he's asked to participated and interestingly enough the words direct and protect the predictable i did not hear  prerogative respect i want to be clear from my perspective i don't really concern myself too much with your specific details if you want the truth my concern here as i said earlier is whether the the overall process within the sec is working as myself and other members of congress think it should be working there the outcome of a given case raises questions about whether the process work i am not here as one member to judge you i'm not qualified to do what i don't know enough information to do it and there are other entities that will do that and so be it i will tell you that from the limited review i did read within the aiji's report there was no indication that i read their no hint no indication of anything of any criminal wrongdoing so my expectation is that maybe was kicked up simply to pass the buck along but we'll see for me i would have to tell you that regardless of your specific actions or the actions of the ethics lawyer at the time knowing what i now know it strikes me that the process of ethical review within the sec at the time was the short coming and that's my  focus that's why i asked the first panel what did you learn what are you doing about it going forward not so much your specific case but it strikes me than anybody with an investment and somebody they are investigating no matter how it is and how much it is somebody should have said wait a minute maybe you shouldn't be doing this i've recuse myself i know you have recused yourself and other matters i've recuse myself on matters in my professional life because there was maybe somebody would see it differently i would be honest i wouldn't expect you as an individual to make that judgment that's what the ethics office is for and that's why that office should be very clear and very precise about its actions and that's why to me i think some of the process that some of the proposal made by the ig ha fixing the process moving forward would you agree that they're good proposals were bed i i haven't thought hard about them they look fine to me i would not if it were my call i would say having ethics report to the chairman or is not a good idea if you are worried about the impact of having a superior someone give advice to a superior i'd worry more if the superiors the head of the agency then i would if the spirit wasn't the head of the agency i have to say lawyers you know the attorney general because legal advise the president united states every general counsel just about of large companies reports to the ceo every lawyer in private practice gives legal advice the people who can hire and fire and retain more or not i don't see this as this big red flag i appreciate your opinion but i would respectfully disagree based on and i there is no perfect process because there's no way you can have somebody who doesn't answer to somebody somewhere along the line the question is far as i'm concerned getting them to answer to as few people as possible and has nothing to do with you or anybody else i think the ig should report directly to the head out of whatever agency there in anyway there's nothing to do with you or sec and plus even though i know it's not a perfect system we have an epic system here in congress it's not perfect but you do the best you can with what you have and that's a matter of opinion but again i want to thank you for coming i want to wish you good luck because i know it's a difficult situation from what i saw your records pretty good i'm hoping that there were no lines cross but that will be decided by other people and i won't say that i respect you for coming in today and talk about what i know is a difficult matter for you thank you very much i think  career and private practice as well today though this is this is it this is a subject matter is very sensitive and with with hindsight i think people are looking at this stuff differently but back in march on in my subcommittee is chairman jet represent mac ask chairman schapiro do you believe that mister becker was sufficiently aware of the need to avoid actual or apparent conflicts of interest chairman schapiro responded do i wish now that he had been more sensitive to the potential of this issue to raise an appearance of conflict yes i wish that had happened in quote do you agree with this judgment i certainly agree that she wishes it hadn't happened and i personally found that statement extremely distressing to me i don't like to think that i let her or the agency down in any way or that anybody feels that way having said that when you go to a doctor you put yourself in the doctors hands when you go to when you seek legal advice you seek you put yourself in in this case the ethics counsel and i followed that advice if the question is notwithstanding that advice should i have said well it's just too risky for me or for the agency i will say i didn't predict in anyway what happened i think trustee was going to sue me i didn't think the sports section of the daily news in new york was going to make a big deal out of this i didn't think frankly that this committee would respond in in the way did i didn't anticipate any of that would have been better if i did you bet in february of two thousand and nine were you aware that madoff trustees were considering clawbacks i don't think so i think what i was aware of that there had been clawbacks recently instituted in very large amounts for people whom the trustee alleged have been complicit in the fraud so you're aware that ok so you are not aware of  madoff beneficiaries outside of large beneficiaries and largest insurers who the trustee said had been involved in the fraud that's correct crap so in that march hearing that i mentioned before chairman shapiro was asked whether she regretted your situation response was quote i wish mister becker had accused himself absolutely do you agree with that judgment at it again  i take that as a sincere statement of her views i'm not asking your judgment on her sincerity when you agree with that judgment that you should have recused yourself i forgive me i i'm i i know i talking a little bit of a roundabout way but i'm getting there i i i think still think that i did what i was supposed to do  and it it it is i will just have to live with the fact unhappily that chairman shapiro has a different view is it your view that you should have recused yourself at that time knowing what you know now i don't know what you mean by knowing what i know now you mean knowing facts about the trustee has sued me i had known the trustee was going to assume of course i would have refute ok now you said you did not you did not know that certain items were knowable about your the inheritance you received that the nature of the madoff account yes do you know more about the nature of that inheritance today that you didn't februari two thousand and nine sure i didn't know and with that knowledge knowing the details of that inheritance and that madoff account knowledge would use it with the knowledge you possess today just simply about that transaction would you have recused yourself i i don't know the answer to that i truly don't i i don't know exactly or even close to exactly what the rationale of the ethics office was and i i think i had the view i i did not for example see the link just didn't ethics office i don't know how important that the sense of imminence of the lawsuit was i don't know that merely the facts of the account would have changed my view  standpoint as a lawyer and one was given advice many times too many people that you went and got the advice of folk and now you find yourself in this difficulty but and that i want to go to some things that were justified to earlier not statistically up some things there was a earlier mister coates talked about subordinates you had gone to subordinates and one of the things that they have cleared up in the new recommendation i know you've been concentrating on other things is to make it you know so that i guess you would report directly these kinds of things to the top i'm did you in any way feel when you were being interviewed talk to and you talk to these seven other people that cleared you said you're okay to do this that they were under any pressure whatsoever know and and in fairness to them i i think the point of my talking to the seven other people is that i didn't make any effort to conceal this i those in fairness to them those weren't not all of them were people who would have had your responsibility to clear me or not and and i i did think it was inappropriate of mister cots to say in his report he saw seven people and none of them said anything about this it had nothing to do with most of their tristana alright well let me give you these questions because i want to make sure we're clear yes sir are you got people probably gonna look at this film fifty million times arm i may reconsider them ok mister becker who exactly had a duty to identify that there was a potential conflict of interest and disclose that information appropriately probably throughout the commission commissioners and the relevant staff who would have that duty can you answer me very briefly yes i i don't think anybody has a duty to report things that aren't conflicts of interest of the united have a conflict of interest or you don't and you didn't believe that you had a conflict that's correct i'm as the id found in his report you seem to not believe that there was a strong possibility that the madoff trustee would bring a clawback action against you specifically as you explained in a may two thousand and nine email to the sec ethics counsel mister lennox boat i your instinct is that any claim you would would be would be much too small and of dubious merit to bring in any event the fact that you viewed the possibility of a quarterback's to bb remote have led you to miss judge whether or not you had a conflict of interest well i i was very careful not to make that judgment that judgment was made  by the ethics office i just told them what i knew and a little earlier there was a question by miss i sir and he asked a question about if any i guess it would be referring to you if you presented bad information to the people that you talk to arm it's not about what the result would be in your mind did you present any misleading information or something that was not true no i'm and the fact that others also viewed the possible we have a clawback suit to be remote have led them to misjudge whether or not you add a conflict of interest i just can't say what was in there and if you had if you thought that you would be subject to a callback lawsuit what would you have done differently if anything hard to say but i probably would not have had participated in the matter and if others at the sec and thought you would be subject to a quadratic lawsuit do you believe they would have done things differently i i guess you mean the ethics office i think they probably would have yes and why did you come here today to testify i mean i know you we ask you to come but i mean what what is your objective my  is to get the truth out as simple as that i got nothing to hide and you've and you believe that i you did nothing wrong is that right that's correct and arm you inform share the information about my mother's account arm what was that all about i didn't treat this as some deep dark secret and i went to the ethics office for advice i didn't say don't tell anybody i didn't tell lots of people just because i frankly didn't think about it but i didn't take any steps to protect this information or conceal it or anything like that genesee much time is run i thank the gentleman mister becker little letter you wrote me and my colleagues you stated that you recognize that it was conceivable that this issue could affect your financial interest because the issue could affect the trust callback actions against persons like you correct now inspector you can see that it might affect your financial efforts in that room if you if you had that if you recognize that wouldn't that of triggered that maybe this that this will have a appearance of a conflict of interest coming now let's just get past the the legal part bettering that is it goes back to what i was saying that while ago sometimes good intentions in good judgment don't always and his is a google play a lawyer that's you know been practicing for a number of years and particularly in an agency like the sec where you're very sensitive to to either actual co close question that i was well within the four corners of of the rule there's appearance in in this sense we've heard this talked about earlier today is the washington post test the new york times test that's very subjective you you can't even trustee was gonna sue me or that it the reaction would be what it has been but but you said both if i misunderstood alert you didn't anticipate that that was a possibility did you not i conceivable i think it was the word  mean there are a whole bunch of things that conceivable but when the admin level of probability is what government but when you can see that you're thinking about it right and so you're aware of it you you don't you you had knowledge that you potentially  could be subject to a callback lawsuit in the background in this matter yes conceivably possibly maybe but i did not think that was going to happen and so i want to go back to  was the someone asked congress ask you to come and testify you'll have a little team meeting and it was decided that you would have to disclose these interests in the  and it was determined that you should not testify that correct no not quite that's not quite how it works what happened was i was going to testify i came to the head of the office of legislative affairs just like i went to ethics and said listen this is a political calculus this is not the world i know i want to know what you think about it he first said so i think it's fine later in the day calls me up and said well i'm a little worried that it's gonna be a distraction and i said well if it's going to be a distraction then you can be sure what's gonna be a distraction the the fact that my mother had an account and i said look you disclosed to to those the ledge folks sure yeah and i also told them that i would mention it up front to take any question that i wasn't disclosing it off the table and i said you guys make the political judgment and later in the day cause music well i don't think it's such a good idea let me check with the chairman thx with the chairman and that evening says to me well i spoke to her and i i think we'd be better off with somebody else i saw the next morning and she confirmed that i think is really all that happened in fact you know you had a conversation in there was some kind of laughing and joking that will you get another opportunity yes i don't think this is what she had in mind but yeah oh here's here's the question and then if you felt like it was missing it was appropriate to disclose to the ledge fares people before you went to congress i'm i'm still trying to reconcile while you didn't think when you're making a very important presentation to the commission between encouraging them to use constant dollar that you didn't think it was appropriate to say to those folks and by the way you know i this could impact me i mean if i was a commissioner or if you are commissioner wouldn't you when you because subsequently to this all of those commission members are not happy that you did not disclose that well i don't know the questions that were asked them the quotation from commissioner add our said he was upset that this conflict wasn't disclosed t i didn't think i had a comfort i was told they didn't have a conflict and you don't generally make a habit of going to people until you know i don't have a conflict but i think you want to know about it you say that and then they say well what message is he trying to send me when it came and so and go back to the high standards of ethical behavior that you hold you know the the people that sec regulates and i just asked in the fact that you in that letter that you is conceivable that you had an issue there and that you had felt later on to to disclose that why why along the process i agree with my good fr that's a process here but there is some personal responsibility that goes with in these positions and that they get how that you didn't think that it was some potential conflict there are moms so much for having a hard time strange i think to say to people i've got something to tell you that i've been told doesn't affect my judgment that i don't believe affects my judgment it doesn't color the advice that i've given them i don't think it would have been inappropriate to tell me that a bad thing to tell them but i didn't think of it and i think the reason i didn't think of it mister becker count me among those who are surprised that you're here today and also impressed with the fact that you're here today you have been very forceful i think with with  us you were very forthright with me when i spoke to you when the story first broke in the new york daily news despite the fact that it was your scheduled last day to be on the job and i appreciated appreciated am i correct in restating that it was your father that opened the account for your mother i believe so i don't know who else could have been i'm quite certain that it wouldn't have been my mother so it had to be somebody other than your mother and that yes logically would have been your father yes it would nobody else was going to give her half a million dollars in an account well my father traveled from time to time but nothing that i knew about  he also opened accounts for charities that again honey too i don't know whether he opened accounts for charities i know he gave money to charity he had a particularly favorite charity  westchester a jewish cemetery rabbinical school outside of philadelphia i'm sorry i fell double what is a rabbinical school to which i believe how they found great deal of money yes you have a great deal of money to them you know if he if he they they did have a madoff account that they sold the year after he died i understand i as i mentioned to you on the telephone in february is the first i had heard of it did your father know madoff know i shouldn't say that i would be amazed if he did you're eighty five years old and you've got a lot of money to invest five hundred zero i suspected was much easier than it appeared would you have thought your father had a reason to know that it was a ponzi scheme my father know my father is the most ethical man i've ever met and i'm sixty four years old so there still may be others but no your mother would  not have suspected that she had an investment in a ponzi scheme know when did when did you suspect that madoff was a ponzi scheme i never suspected until i read it in the newspaper or however not not that i saw not that i heard of not that anyone i mean what we now know there were but i had no idea of that so you had no way of knowing or should have known that it was a ponzi scheme i that's  correct anybody have known that it was upon this game could anybody know i think once the thought enters your mind that it is a ponzi scheme it's not that hard to figure out that there was an alternative view to last statement she brought it she brought the case to your attention is that not accurate ah i'm i  don't want to insult move now the nazareth and she may be sorry to hear this i don't remember that she brought anything to my attention on this i remember other lawyers who were involved i think the report had stated that she wrote a letter on behalf of her clients well it's interesting that that is i have to say a characteristic of this report she was one of i don't know ten twelve signatories to that letter she didn't write the letter but there were others who had that view yes indeed there is a subcommittee chairman of our committee was a bill that says that we should be using that methodology yes where that if if you had gone along with that suggestion which is a bill before this congress and proposed by people and written to the commission among others if you had adopted that view you would have been a greater beneficiary that's what i've been told i guess that's correct but i frankly the thought never crossed my mind why did you decide that the view should be the cost of money we struggled for that literally four months we were very worried  about the impact of this on you know at that time that you are the beneficiary of an account i knew i was a beneficiary well i knew that my i got money from my mother's estate i didn't get an account i knew your before yep i'd already agreed to come to be about you your brother liquidated a two million dollar asset within an account to which you were a beneficiary without you knowing that there was even that account is that what you're telling us that united is exactly what i'm there was a lot more money in that account that two million dollars was not a significant thing to tell you i don't know why my brother didn't tell me i think the money when he did tell me better is basically  called me up and said isn't this interesting in effect this guy madoff we sold we saw that of his account to pay estate taxes a few years ago that's all he told me and that's when he told me and at that i reviewed i sat down with them for other know an hour two hours reviewed anything and everything you know what clawback was at that time i'm not yes i knew what it was yes do you think that the people in the ethics business knew what quarterback was at that time i don't know the answer to that they're not necessarily the sophisticated person and finances as are you though i i really don't know what they knew but you even even though there was only a slight possibility of you being subject to clawback you did not think that it was appropriate to suggest to them that you might have that problem oh i i i'm i'm sure that when it became relevant anything that i was doing that i did mention that today went back to them and told them that you might be subject to a blowback absolutely and they did not suggest at that time a different answer than they gave you the first time because if there was club back you would be subjected to a legal action no no they didn't and  recommend the constant dollar approach to them that they understood that this choice would affect the amount of the trustees could seek an incall backs that did you know i didn't i read the inspector general's report and referenced all sorts of things conversations that apparently took place before i got to the sec and no i did not know that you did not know that the rule that the commissioners testified knew what affect the amount of trustees could seek in a clawback you didn't know this that is that is correct and i have to say i wasn't saying like your account i'm just saying generally speaking at this constant dollar perch would affect the value of what they could see can clawback the the only area that we we as an office and i as a human thought about that was clawing back mon in claw back cases i know very well that if i were representing the trustee for a lot of arguments i can come up with that it wouldn't yeah i mean that is being argued right now ya in court ok now in terms of  you said that the possibility of crawl a clawback for for the account europe and air to be clear you're an heir to was remote right so that i thought of it as remote yep angry that you didn't disclose this to them they're you're client in essence i mean your general counsel but but you disclosed this as a matter of optics is really the discussion you know and in matters of appearance to legislative affairs office right you mention it to the chairman of the very beginning you went to the ethics office said was fine but then you bring it up commissioners i i will say that this is a different arena requiring different judgments of a frankly when you're testifying in front of congress politicians have been known to be  political and and and you think about things differently than when you think about simply what do i need to tell my client and i just i was out of my depth when it came to political judgment interesting show i just got to ask you this too with the mess that you're coming back to the sec to help clean up which was at the ramifications of this missing madoff excellent so what you'll be able to that great answer there's two sides of this if if i'm looking trying to think of a delicate way to put this i worry sometimes that people spend on too much time worrying about covering the rear ends than doing the right thing i had a job and i wanted to do my job and sure if my principal was concerned concern was i want to take no risks that i'm going to be criticized the agency is going to be criticized that's what i would have done but i the risk that what would happen happen that this would get all is press that david cuts would write a dreadful report and that we have two hearings on the same subject did not occur to me so you just didn't consider recusing yourself oh i considered it i that's why i saw guide sought guidance from ethics i was told that in effect there was no need for me to consider myself have you recuse yourself previously i but i'd say certainly the vast majority of the time where there somewhere you just said you know i just out of appearance sake i i should so i should recuse myself i should say i can't remember a time when i didn't follow the advice of ethics and frankly inspector general c mention that i got treated differently from other people and and i get it he couldn't be more wrong but i guess i always followed ethics advice i guess is a lawyer expect my clients to follow my advice and and as a non hypocrite i behave the same way and because you remember the bar you should have a higher ethical standard as well i will match my ethical standard against anybody in this room in a heartbeat do you see how people have a problem with the appearance that you're an heir to made of account that a decision that you recommended to the sec a governmental regulator then affected your financial well being even if it's small do you think that's a problem i you know i the problem with this is the standard that you're using as a sort of appearance standard is it's almost like a perpetual motion machine you say you know i think it's a problem so it must not look good and and in truth  over my career i'm pretty careful about ethical matter and i do see what has happened i'm not pleased about what has happened and i think that there's a whole range of reactions ranging from absolutely sincere to a lack of understanding as to the facts lack of understanding as to the legal standards and some people whose motives i must add on trusting and finally i did thanks for the chairs indulgence knowing that you were subject to a call back okay knowing that if you knew just that fact would you have recused yourself you you were in the agency previously yes you left yes he went into the private sector yes you're learning a lot of money why'd you come back oh it's sort of hard to answer that in itself than on self agency i've represented clients before the agency for a long time and i thought the agency needed to look at things differently and do things differently and i thought it was my duty to do and very called me up in her words were david your country needs you how do you refuse th you came back because it was a challenge well that to you came back because your talents were needed i was yeah i was flattered into believing that yes if you would have recused yourself you would have taken yourself out of the action and your ability to help which is the reason you came back evidently i i think that is correct yes in your exuberance to do that you think that colored your view as to whether or not you should have recused yourself well it's why i didn't rely on my view that's why i basically had someone else make the decision because i truly believe that when it comes to one's own conduct and no one is a very good judge the fact that you stood to gain even what do you might be a small amount didn't color you've you to make that decision to go with constant dollars of the cost of money we wanna present i can honestly say i did not give that instance thought why did you decide that constant dollars was the best of the various proposals well choose the reported that you wrote that you wrote a animagus submitted it to the court supporting that position why did you think that was the best way to go well our attitude frankly was to find theories that would enable us to get as much money as possible within the law to victims and we sort of bumped around and big into other things among other things and we came up with something we came up with constant dollars and the more i thought about it the more i became convinced that where i judge i would say that's the right interpretation of the law so i said let's go with it i will reveal to you that i am among a group of people and the main sponsor of legislation because i came to the same conclusion you did and thought that would help the greatest number of people who are made  second part of that first part is true and what is my question is is it easier to see it on me than it is on yourself well i think that's a a fair question and this is a part of the country in which ones motives are constantly question and as i say i did not see this coming and if i had it might well have affected my judgment well nobody asked me but i'll tell you what i think i think you got blindsided slightly while trying to do the right thing and are paying a personal price to it and then that's politics and it happens here very often  i'm any judge and i'm not i hope you don't have to have a real one give you a determination but it seems to me that that you acted on the best of instincts and exercise some judgment that some people may want a question for political reasons and for judgmental reasons and appropriate reasons as well but if it means any saying and it certainly doesn't record a law but i think your dad would be proud of you late mother's madoff account is that true she says it it must be true i have no recollection of that but she is completely honest woman it did you discuss thousand and nine looking through e the typical correspondence with sec it was a little odd that it wasn't directed to you is the general counsel rather than the chairman or the the board but no not at all i'm it's asking for the sec to take a certain position in court and so i would be the one who got the ok ok then but then i but then out but this except what you're saying but that they ask particular intervention on the male's trustees choice of an account evaluation the last account statement method didn't she if you recall their site i believe yes ok  so isn't it did did you considering you're the account you're an heir to in in light of this you did this enter into your thought process well this and the proceeds of that and that check included money that apparently came from an account that i didn't know anything about this that letter was what led me to consult with the ethics off so yes i did consider them that ok it's in it show you consulted in may of two thousand and nine with ethics office i consulted twice i consulted a door about the time i came and on this particular matter ok and and they cleared you again yes ok so did you consider so obviously so you consider that that this could have an effect on you at that point or potentially i considered as my email says that it was conceivable that it could have an effect ok so why didn't you recuse yourself at that point because they're all sorts of things that are conceivable and it's all about probability and based i did not know facts i mean i basically put all the facts in front of the ethics office said here's what i know  me as to whether this falls within this relevant statutes and rules and i was told no it doesn't okay and you said that you did that certain items about this this that the proceeds of this account which you are the heir of just to say it correctly that you didn't know it was noble to have this information about the account correct it why not in may when i now know for certain that he did not know it's simply did not have the information as when the account was opened and and how much was put into the account  i that information just wasn't available in terms of the state tax that wasn't the important information no state tax isn't based on the game during the lifetime of  values the assets as of the time of death so it was not relevant all ok ok so do you think it was troubling though that commissioner nazareth and knowing that you had received these proceeds of a madoff account that you could be subject to this callback it would do do you think that was and asked me to take an official action do you think that's questionable i think you're attributing a lot in there and knowledge to me in a lot of night and all knowledge that i had to commissioner nazareth and i doubt that was the case i'm a professional commissioner nazareth is a professional we represent clients and we advocate the views of clients and i'm and had she thought about it i'm sure she would have thought that refusal or not was between me and the ethics office no i don't know that she thought about it ok professionals make mistakes yes they do and and thank god for that or i wouldn't have a living yeah that's correct but knowing what you know now you would work use yourself what you know well you see your daughter's what i know now if i knew that i was going to be sued sure you're testifying before congress because of this appearance of impropriety your test it yet you have inspector general's report that's been referred to the justice department because of this you've been sued mean you would if you you're able to rewind the tape would you have recused yourself i would recuse myself if i knew that was going to be sued for legal reasons the fact that inspector general scott's is making a big fuss  about having sent something to the justice department doesn't move the needle as far as i'm concerned i have seen inspector general carts do this before make a big fuss lots of publicity  about sending reports to the justice department nothing has happened with any of them and some of them that i recall from my time at the sec were laughable is this laughable you know they they say mister becker we appreciate you coming in my pleasure night giving us your time i want to remind all members that they have a they may have additional questions for this panel which show they may wish to submit and writing without objection the hearing record will remain open for thirty days to members to submit written questions to these witnesses and place our responses in the record and tatianna thank you you this hearing is closed