SIPC ISSUES STATEMENT ON LEHMAN BROTHERS INC.: NO LIQUIDATION PROCEEDING ANTICIPATED
WASHINGTON, D.C. – September 15, 2008 – The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, issued the following statement this morning in relation to reports about the bankruptcy filing of Lehman Brothers Holdings, Inc.
SIPC President Stephen Harbeck said: “SIPC has not initiated a liquidation proceeding against the broker-dealer Lehman Brothers Inc. and we do not currently anticipate doing so. As of this morning, it appears that all customer cash, stocks and other securities are accounted for.
It is important to understand that the holdings of broker-dealer Lehman Brothers Inc., would not be directly impacted by a bankruptcy filing at the separate entity Lehman Brothers Holdings, Inc.
Should the situation at Lehman Brothers Inc. change in some material way not now anticipated by SIPC and regulators, we will, of course, intervene as necessary to protect the cash and securities of customers. However, I want to underscore that such an action is considered unlikely at this time.
SIPC is working closely with the U.S. Securities and Exchange Commission (SEC) to monitor the situation at Lehman Brothers Inc.
The Securities Investor Protection Corporation remains vigilant and committed to our core mission: When a brokerage firm is closed due to bankruptcy or other financial difficulties and customer assets are missing, SIPC steps in as quickly as possible and, within certain limits, works to return customers' cash, stock and other securities. Without SIPC, investors at financially troubled brokerage firms might lose their securities or money forever or wait for years while their assets are tied up in court."
ABOUT SIPC
The Securities Investor Protection Corporation is the U.S. investor's first line of defense in the event a brokerage firm fails, owing customer 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 of each customer up to a maximum of $500,000. This figure includes a maximum of $100,000 on claims for cash. From the time Congress created it in 1970 through December 2006, SIPC has advanced $505 million in order to make possible the recovery of $15.7 billion in assets for an estimated 626,000 investors.
For more information about SIPC, see "The Investor's Guide to Brokerage Firm Liquidations" at http://www.sipc.org/pdf/SIPC_brochure_Investors_Guide_To_BD_Liquidations.pdf.
MEDIA CONTACT: Leslie Anderson, (703) 276-3265 or landerson@hastingsgroup.com. All investor inquiries of SIPC should be directed to asksipc@sipc.org or (202) 371-8300.
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