SIPC Advances Used to Facilitate Recovery of $9.1 Billion for Customers
WASHINGTON, Sept. 20, 2012 /PRNewswire-USNewswire/ -- Nearly $2.5 billion in checks were mailed Wednesday (September 19, 2012) to victims in the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS). The Securities Investor Protection Corporation (SIPC) today applauded the hard work of Trustee Irving H. Picard and his attorneys in reaching that major milestone.
Approximately $17.3 billion in principal is estimated to have been lost in the Ponzi scheme by direct BLMIS customers who filed claims. When combined with the funds already returned to BLMIS customers, the second interim distribution satisfies more than 50 percent of the total Madoff accounts with allowed claims. Nearly 1,100 accounts were covered by the second distribution.
The Trustee's recovery of more than $9.147 billion has been made possible through advances provided by SIPC, which is funded by the securities industry. To date, SIPC has advanced over $800 million to pay customer claims and an additional $621 million to fund the liquidation proceeding. No monies recovered by the Trustee have been used to pay any administrative expenses. All recoveries made by the Trustee benefit customers.
SIPC President Stephen Harbeck said: "This shows that the customer protection program created by Congress works. Trustee Picard has been tireless in his efforts to recover monies and distribute them in a fair and equitable way to all customers with allowed claims at the failed BLMIS brokerage. In doing so, he has been able to satisfy more than half of the BLMIS accounts with allowed claims. We are pleased that SIPC has played an important role in making possible the recoveries. SIPC will continue to work with the Trustee to achieve the maximum recovery for customers."
The Securities Investor Protection Corporation is the U.S. investor's first line of defense in the event of the failure of a brokerage firm owing customers 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 for customer cash and/or securities held in custody with the broker for up to a maximum of $500,000 per customer. This figure includes a maximum of $250,000 on claims for cash. From the time Congress created it in 1970 through December 2010, SIPC has advanced $ 1.6 billion in order to make possible the recovery of $ 109.3 billion in assets for an estimated 739,000 investors.
All non-media/investor inquiries of SIPC should be directed to firstname.lastname@example.org or (202) 371-8300.
SOURCE Securities Investor Protection Corporation, Washington, D.C.