Liquidation Proceeding for Bernard L. Madoff Investment Securities LLC Undertaken by Securities Investor Protection Corporation
Trustee Appointed By Court; SIPC Taking Action to Protect Customer Assets.
SIPC today filed an application with the United States District Court for the Southern District of
SIPC President and CEO
Mr. Harbeck cautioned, however, that the scope of the misappropriation and the state of the defunct firm's records will make this more difficult than in most prior brokerage firm insolvencies. "It is unlikely that SIPC and the Trustee will be able to transfer the customer accounts of the firm to a solvent brokerage firm. The state of the firm's records may preclude a transfer of customer accounts. Also, because the size of the misappropriation has not yet been established, it is impossible to determine each customer's pro rata share of 'customer property.'"
The trustee is charged with giving notice of the proceeding and mailing claim forms to the customers and other creditors of the firm. Information about the case also will be made available on the Web at www.sipc.org.
Mr. Picard stated that he is acutely aware of the concern of investors who have been caught up in this financial scandal. "I will work with SIPC to do what the law allows to ameliorate the losses to customers."
The Securities Investor Protection Corporation is the U.S. investor's first line of defense in the event a brokerage firm fails, owing customer cash and securities that are missing from customer accounts. SIPC either acts as trustee or works with an independent court-appointed trustee in a brokerage insolvency case to recover funds.
The statute that created SIPC provides that customers of a failed brokerage firm receive all non-negotiable securities -- such as stocks or bonds -- that are already registered in their names or in the process of being registered. At the same time, funds from the SIPC reserve are available to satisfy the remaining claims of each customer up to a maximum of
For more information about SIPC, see "The Investor's Guide to Brokerage Firm Liquidations" at http://www.sipc.org/pdf/SIPC_brochure_Investors_Guide_To_BD_Liquidations.pdf.
CONTACT: Ailis Aaron Wolf, for SIPC, (703) 276-3265, or firstname.lastname@example.org. All investor inquiries of SIPC should be directed to email@example.com or (202) 371-8300.
SOURCE Securities Investor Protection Corporation,