SIPC STATEMENT ON U.S. COURT OF APPEALS UPHOLDING OF MADOFF TRUSTEE "NET EQUITY" CALCULATION
WASHINGTON, D.C. – August 16, 2011 – Orlan Johnson, board chairman of 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 today:
"Regarding the decision by the Second Circuit U.S. Court of Appeals in New York upholding Trustee Picard's method of calculating investor losses for the liquidation of Bernard L. Madoff Investment Securities LLC, the opinion confirms SIPC's position that the Trustee's calculation does the greatest good for the greatest number of Madoff victims, consistent with the statute SIPC administers and with past precedent on the matter.
This decision will advance the prospect of making a distribution of customer property and we look forward to getting funds to BLMIS customers as soon as possible. SIPC filed an extensive brief with the Court, which explains our position in detail."
SIPC has advanced $780,000,000 to the Trustee in the Madoff case, which has been distributed to customers.
The opinion from the court can be found at http://1.usa.gov/qAlG0y. SIPC's brief can be found here.
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.
MEDIA CONTACT: Ailis Aaron Wolf, (703) 276-3265 or email@example.com. All investor inquiries of SIPC should be directed to firstname.lastname@example.org or (202) 371-8300.
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