Thursday, December 18, 2008

The SEC Attorney and The Niece

More details are coming out about the potential conflict between the SEC staff attorney who oversaw at least one "inquiry" at Madoff's firm, and Madoff.

By now everyone knows that the attorney married Madoff's niece, who was the compliance officer at the firm. The original story said that he left the Commission in 2006, they started dating in 2006 and got married in 2007. The original stories also said that he supervised an inquiry at the firm, at some unspecified time.

Now the AP is reporting that he was part of a team that examined (not just "supervised an inquiry") Madoff's brokerage firm operation in 1999 and 2004. As we know, neither resulted in any action against Madoff. The attorney's spokesman said he met the niece at a breakfast in October 2003, started dating in April 2006 and were married last year.

I was hoping that the end result of this story was that the attorey didn't know the niece until after he left the Commission, but that is apparently not so. However, there is nothing that says that he was dating her when he examined the firm. Meeting someone, or knowing someone, does not cause an automatic conflict.

But this case has more than its share of side stories. And I would imagine that the Mukasey recusal is the first of a number of conflicts that we are going to see as the cases move forward.
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