Madoff trustee sues SEC lawyer over $1.5m profit - papers

The family of the US Securities and Exchange Commission's (SEC) top lawyer made $1.5m by investing with fraudster Bernard Madoff, according to a trustee for victims of the ponzi scheme.

David Becker, general counsel for the SEC, is being sued by court-appointed trustee Irving Picard, who is seeking to recover assets from the estate of Becker's mother, who died in 2004, the Guardian reports.

Picard alleges she made $1.5m investing with Madoff, who is serving a 150-year jail sentence after being convicted of running a $65bn Ponzi scheme in 2009.

The lawsuit does not allege Becker or his brothers had any knowledge of the fraud, although they were co-executors on their mother's estate.

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Federal Reserve member calls for Wall Street banks break up

A member of the US Federal Reserve has called for Wall Street's financial giants to be broken up to avoid another financial crisis.

Thomas Hoenig, the Kansas City Federal Reserve Bank President, claims the current overhaul of financial regulation in the US will not prevent the largest banks from taking excessive risks and increasing market share, the Telegraph reports.

He says: "I am convinced that the existence of too-big-to-fail financial institutions poses the greatest risk to the US economy

"They must be broken up. We must make sure that large financial organizations are not in position to hold the US economy hostage. We must not allow organisations operating under the safety net to pursue high-risk activities and we cannot let large organisations put our financial system at risk."

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IMF warns of two-speed recovery

Europe and the west are vulnerable to a weak recovery and emerging economies face severe overheating becuase of a two-speed global economy, the International Monetary Fund (IMF) has warned.

In a report on the G20 finance ministers' recent meeting, the organisation says Europe's financial sector remains fragile and could suffer further shocks while countries like Brazil and China are grappling with rising demand and soaring inflation from jumps in commodity prices, the Guardian reports.

The situation is being made worse by a flight of capital from west to east as investors desert advanced economies in favour of strongly growing emerging economies.

The report, written by the IMF's economic staff, calls for emerging economies to allow their currencies to rise and urges Europe's politicians to react by repairing their weak financial systems.

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