WWW.SIPCMODERNIZATION.ORG LAUNCHED TO GATHER PUBLIC INPUT, TASK FORCE TO UNDERTAKE REVIEW OF SIPC
WASHINGTON, D.C. – June 17, 2010 - The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund mandated by Congress to protect the customers of insolvent brokerage firms, today launched a new Web site, http://www.SIPCModernization.org, and also announced the formation of a 13-member SIPC Modernization Task Force.
The twin efforts are part of a full-scale review of the operations of SIPC, which has not been the focus of major new legislation in 30 years. The state-of-the-art SIPCModernization.org Web site will be used to gather input from the public through online comments, live interactive forums and national Webcast. Beginning with its initial gathering today in Washington, D.C., the SIPC Modernization Task Force will meet in person and via the Internet to review and discuss the mission and operations of the Securities Investor Protection Corporation.
SIPC Board Chairman Orlan Johnson said: "SIPC embraces the challenges and opportunities represented by vigorous scrutiny of this sort and welcomes any feedback that will help us do an even better job for American investors. The last significant amendments to the Securities Investor Protection Act (SIPA) were made three decades ago in 1980. The Task Force's mandate is to propose to the board of the Securities Investor Protection Corporation such statutory amendments as may be necessary, useful, or appropriate, given the passage of time, changes in the securities industry, and judicial precedents construing SIPA."
SIPC Board Vice Chair Sharon Bowen said: "The findings of the Task Force will be reviewed carefully by the SIPC Board and we also intend to make the recommendations public. The expertise of the Task Force participants is sure to be reflected in the excellence of the final product that is submitted to SIPC. The written report, or series of reports, will aid the SIPC Board, and Members of Congress, in enacting reforms that better protect investors and reinforce confidence in the capital markets."
Johnson, an attorney at Saul Ewing LLP, Washington, DC, will serve on the Task Force along with Bowen, an attorney at Latham & Watkins LLP, New York City. Johnson will serve as chair of the Task Force and Bowen will be the vice chair.
In alphabetical order, the other Task Force members are:
- Philip Aidikoff, Aidikoff, Uhl, & Bakhtiari, a plaintiffs' lawyer and Public Investors Arbitration Bar Association (PIABA) member, Beverly Hills, CA.;
- Joseph Borg, Director, Alabama Securities Commission;
- Steven Caruso, Maddox, Hargett, & Caruso, a plaintiffs' lawyer and PIABA member;
- Chen Gongyan, board chairman, China Securities Investor Protection Fund Corporation Limited, Beijing, China;
- Professor John Coffee, Adolf A. Berle professor of law, Columbia University Law School, New York City;
- James Giddens, Lehman trustee, Hughes Hubbard & Reed, New York City;
- Ira Hammerman, senior managing director and general counsel, Securities Industry & Financial Markets Association (SIFMA), Washington DC;
- William Heyman, SIPC director, and vice chairman and chief investment officer, The Travelers Companies, Inc., New York City;
- Melanie Senter Lubin, securities commissioner, Office of the Attorney General, Maryland Division of Securities, Baltimore;
- Daphne Smith, assistant commissioner for securities, Tennessee Department of Commerce & Insurance, Securities Division, Nashville, TN; and
- Observer: Michael A. Macchiaroli, associate director, Division of Market Regulation, U.S. Securities and Exchange Commission, Washington, D.C.
ABOUT THE SIPC MODERNIZATION WEB SITE
The SIPCModernization.org Web is intended to facilitate the widest possible range of public comments on current SIPC operations and possible changes to them. The Web site features the following elements:
- Key topics (e.g., "levels of protection") that can be commented on and rated by visitors.
- The ability for visitors to add new topics in order to express and solicit views.
- Two live, national Q&A Web forums providing an opportunity for direct interaction with SIPC Task Force members and staff.
- A national Webcast with phone and email interaction opportunities.
The topics portion of the SIPCModernization.org Web site is already live. Two Q&A forums and a Webinar will be scheduled in the coming weeks and months. To keep abreast of planned SIPCModernization.org events, go to http://www.SIPCModernization.org, where additional information will be posted in the near future.
ADDITIONAL INFORMATION ABOUT THE TASK FORCE
The SIPC Modernization Task Force will present its findings, conclusions, and proposals in a written report, or possibly a series of reports, to be submitted to the SIPC board of directors. The board will review the findings, conclusions, and proposals with a view to legislative changes and other potential improvements. It is anticipated that written Task Force reports and related documents will be public, in light of investor interest and a stated interest in the project by Congressman Paul E. Kanjorski, chairman of the U.S. House of Representatives Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises.
The Task Force will be chaired by SIPC's chair and vice chair. The Task Force is a diverse group, and includes representatives of the securities industry, investors, government regulators, and academia, from across the nation, as well as one international member. It is expected that the Task Force will study various topics, including corporate governance, coverage, the SIPC Fund, investor education, excess SIPC insurance, and international affairs.
With the assistance of consultants and SIPC staff, the Task Force will compile data and review earlier reports, identify key issues, provide assessments, and suggest reforms and the means to their implementation. The Task Force also will discuss any impediments and the estimated costs of any proposed reforms to SIPC, its members, and the public.
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 2009, SIPC has advanced $1.2 billion in order to make possible the recovery of $108 billion in assets for an estimated 763,000 investors.
MEDIA CONTACT: Ailis Aaron Wolf, (703) 276-3265 or firstname.lastname@example.org. All investor inquiries of SIPC should be directed to email@example.com or (202) 371-8300.
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