SIPC Announces New Acting Chair of its Board of Directors
Sharon Bowen Will Succeed Outgoing Orlan Johnson as Acting Leader of SIPC Board
WASHINGTON, Feb. 27, 2012 /PRNewswire-USNewswire/ -- The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund mandated by Congress to protect the customers of insolvent brokerage firms, today announced the withdrawal of Chairman Orlan Johnson from its Board of Directors. He will be succeeded by Sharon Bowen, who previously served as vice chair of the SIPC board, who will serve as acting chair.
Chairman Johnson stated: "My term as chairman expired in December 2011. Given my other responsibilities, I believe it is time for me to step aside. Vice Chair Sharon Bowen will provide exceptional leadership for the Board. I have worked closely with Sharon on both the Board and the SIPC Modernization Task Force. She has a complete command of the issues facing SIPC. With the completion of the Task Force's work and recent delivery of the Task Force's Report, which I promised upon my confirmation, I will leave SIPC in good hands."
SIPC President Stephen Harbeck said: "Chairman Johnson took office at a critical time for SIPC and the entire financial sector. He has been an outstanding chairman of this corporation during the financial crisis. Everyone connected with SIPC appreciates the leadership, guidance, and support the chairman gave to the organization during his term. The direction provided by the chairman involved complex and difficult decisions. Through it all, Orlan Johnson made the decisions that were consistent with the Securities Investor Protection Act, with both grace and conviction."
The Securities Investor Protection Corporation is the U.S. investor's first line of defense in the event a brokerage firm fails, 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 custodied 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.
SOURCE Securities Investor Protection Corporation, Washington, D.C.