WASHINGTON, Feb. 1, 2017 /PRNewswire/ -- The Securities Investor Protection Corporation ("SIPC") is warning investors and the general public of a scam involving the misuse of SIPC's name. SIPC protects customers of failed securities broker-dealers that are members of SIPC and that are in liquidation under the Securities Investor Protection Act ("SIPA"). In a SIPA liquidation proceeding, SIPC advances funds to replace customers' missing cash and securities. In addition, trustees under SIPA may seek to recover missing customer assets for distribution to customers.
Recently, it was reported in a news source that an individual or business fraudulently claimed to have been commissioned by SIPC to help a defrauded investor recover his money. The investor allegedly was told that he would need to pay the fraudster, in advance, a percentage of the lost sum in order to complete the recovery process. The representations made were false.
Investors should be aware of the following:
- Pending customer protection proceedings are listed on SIPC's webpage at http://www.sipc.org/cases-and-claims/open-cases. The webpage also contains information about the case and contact information for the trustee overseeing the liquidation.
- A SIPA liquidation proceeding always takes place under the supervision of a federal Bankruptcy Court.
- Only the court-approved trustee and counsel in the SIPA proceeding generally are authorized to recover customer property.
- Trustee and counsel are paid for their services with brokerage firm funds or if such funds are unavailable, out of SIPC funds. Such compensation is subject to approval by the Bankruptcy Court.
- Customers will never be asked to pay any amount to assist in the recovery process in the liquidation proceeding or to process their claims.
- All amounts recovered for customers are shared pro rata by customers and distributed in the liquidation proceeding, with court approval.
- In a SIPA liquidation, SIPC does not "commission" individuals or businesses to recover assets for any individual customer.
Should you have a question about a notice or unsolicited call that you receive that involves SIPC, or if you are the subject, or suspect that you may be the target, of such a scam, or otherwise become aware of a misuse of SIPC's name, SIPC asks that you report the fraud or potential fraud to SIPC by e-mail at email@example.com or by telephone at 202-371-8300.
Media Contact: Kristen McCaughan, firstname.lastname@example.org, (202) 276-4961
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SOURCE Securities Investor Protection Corporation (SIPC)