SIPC Issues Statement on SEC Decision Not To Pursue Stanford Appeal

WASHINGTON, Sept. 5, 2014 /PRNewswire-USNewswire/ -- The Securities Investor Protection Corporation (SIPC) today issued the following statement in the wake of the decision by the U.S. Securities Exchange Commission not to pursue additional legal appeals following the U.S. Court of Appeals for the District of Columbia upholding the District Court decision that Stanford International Bank CD Investors do not meet the definition of "customer" under the Securities Investor Protection Act (SIPA).

SIPC President Stephen Harbeck said: "While SIPC has always had great sympathy for the people who purchased the Certificates of Deposit issued by the Stanford International Bank, the statute that SIPC administers does not address the losses of these victims.

As always, SIPC continues to focus on our core mission: protecting customers against the loss of missing cash or securities in the custody of failing or insolvent SIPC member brokerage firms. We will continue to work within the mandate of the Securities Investor Protection Act to protect customers in this manner."

ABOUT SIPC

The Securities Investor Protection Corporation (http://www.sipc.org) 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 2013, SIPC has advanced $ 2.1 billion in order to make possible the recovery of $133 billion in assets for an estimated 772,000 investors.

SOURCE Securities Investor Protection Corporation, Washington, D.C.