SIPC: Lehman Agreement Paves Way For 100 Percent Return Of Customer Property
Under Agreement, No SIPC Fund Advances Needed To Satisfy Customers; Resolves Tens of Billions in Claims From LBI's Single Largest Claimant
WASHINGTON, Oct. 5, 2012 /PRNewswire/ -- About $38 billion in claims relating to the Lehman Brothers Inc. (LBI) liquidation proceeding will be resolved and the way paved for a 100 percent return of customer property if the agreement in principle reached today by James W. Giddens, Trustee for the liquidation of LBI under the Securities Investor Protection Act (SIPA), and Tony Lomas, the Joint Administrator of Lehman Brothers International (Europe) (LBIE) is approved by the Court. The Securities Investor Protection Corporation (SIPC) today applauded the hard work of Trustee Giddens and his attorneys in reaching that major milestone.
With the return of all LBI customer property, no advances from the SIPC Fund will be necessary to make LBI customers whole.
SIPC President Stephen Harbeck said: "This agreement is a significant achievement that will benefit customers in several ways. Not only will it allow for 100 percent of customer property to be returned, it will allow for the return of securities and cash to customers and creditors in a much more expeditious fashion than if ongoing litigation had continued. SIPC's goal is always to achieve the maximum recovery for customers and Trustee Giddens's efforts have yielded the best possible results. SIPC looks forward to continuing to work with the Trustee to finalize this agreement and to its approval by the Court so the distribution of funds to customers can commence."
Full details on the agreement in principle can be found at http://www.lehmantrustee.com.
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 email@example.com or (202) 371-8300.
MEDIA CONTACT: Ailis Aaron Wolf, for SIPC, (703) 276-3265 or firstname.lastname@example.org.
SOURCE Securities Investor Protection Corporation, Washington, D.C.