David Becker and his brothers agreed to pay $556,017 to settle the case brought by Irving Picard, the trustee seeking money for former customers of Bernard L Madoff Investment Securities LLC.
The payout represents roughly all of the so-called fictitious profits that the Beckers received after inheriting money from their mother Dorothy, who died in 2004. Madoffs fraud was uncovered in December 2008.
Lawrence West, a partner at Latham & Watkins, which represents Becker, declined to comment. Becker is now a partner at Cleary Gottlieb Steen & Hamilton. The settlement follows a November decision by the US department of justice not to pursue an investigation into whether Becker had a conflict of interest by joining SEC discussions over payouts to Madoff victims, despite having a financial stake in the outcome.
Two months earlier in September, the SECs inspector general, David Kotz, had accused Becker of having a conflict of interest for getting involved, after he and his brothers had inherited roughly $2 million in Madoff funds.