WASHINGTON, Jan. 7, 2014 /PRNewswire-USNewswire/ -- The Securities Investor Protection Corporation (SIPC) issued a statement today in connection with the announcement of the forfeiture of $1.7 billion by JPMorgan Chase Bank, N.A., for distribution to victims of the Bernard L. Madoff Investment Securities LLC fraud.
SIPC President Stephen Harbeck said: "We commend Trustee Irving Picard and his team for their tireless efforts in uncovering the facts that led to the U. S. Attorney/JPMorgan Chase forfeiture as it relates to Bernard L. Madoff Investment Securities LLC. SIPC financed the Trustee's investigation that developed those facts, which was done at no cost to either former BLMIS customers or taxpayers. The Trustee's cooperation and sharing of information with the U. S. Attorney's office shows how the work under the Securities Investor Protection Act to return funds to investors when a brokerage firm fails may have a broader impact for the benefit of 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 2012, SIPC has advanced $2.1 billion in order to make possible the recovery of $120.7 billion in assets for an estimated 770,000 investors.
SOURCE Securities Investor Protection Corporation, Washington, D.C.