Federal prosecutors chose last month not to open an investigation into whether David Becker, the SEC's former top attorney, violated conflict-of-interest laws during the Commission's handling of the Bernie Madoff Ponzi.  Despite that clearance, the Commission decided it would take a revote on what formula should be used to calculate victims' claims. Back in 2009, the Commission voted to back use of a formula that Mr. Becker supported - one based on the money victims invested minus their withdrawals, adjusted for inflation.  However, it later came to light that attorney David Becker participated "personally and substantially" in the agency's initial vote when he had a financial interest in the matter. As you may recall, Mr. Becker and his 2 brothers were heirs to their mother's 2004 estate, which included about $2mn that had been invested with the Madoff firm. Becker told SEC Chairman Mary Schapiro about his tie to the Madoff case and received clearance from the SEC's former ethics counsel to work on Madoff matters.  However, his link to the case didn't become known to other SEC commissioners until he was sued by Madoff trustee Irving Picard, who sought to clawback profits taken by the Becker family. SEC Inspector General H. David Kotz conducted an internal investigation, then referred the matter to federal prosecutors.  He also recommended to the Commission that it take a revote to ensure that there is no "possible bias or taint." And so, with its decision to take a revote - which it has not already done - the SEC seeks to close out one of its most prominent conflict-of-interest cases.  An SEC spokesperson has said that SEC staff members are working on a recommendation for the commission, although no date has been set for the revote. The spokesperson also said that the SEC has already adopted reforms of the agency's ethics office recommended by Mr. Kotz, including that its ethics counsel report directly to the chairman and that the ethics office document its advice.  Previously, the office was housed within the general counsel's office and the former ethics counsel was reluctant to keep written records of advice, Mr. Kotz found.    [WSJ Online, 11/1011]