News Release

WASHINGTON, D.C. - July 10, 2002 - The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, is unveiling a first-of-its-kind national television and radio public service announcement (PSA) campaign in English and Spanish to help improve investor understanding of the extent and limits of SIPC protections.

The new PSA campaign, "Protect Your Nest Egg," is now being distributed to 1,200 television stations, 500 cable TV systems and 5,200 radio stations in the United States, including several hundred in-language Spanish outlets. The campaign features TV and radio messages in both English and Spanish. To see and hear streaming versions of 11 of the public service announcements, go to www.sipc.org/media/streaming.cfm.

The SIPC public service announcements spell out not only on what the congressionally mandated organization can do for investors, but also what SIPC does not do. For example, the new PSAs specifically emphasizes that SIPC coverage and FDIC bank insurance are not the same thing. The TV and radio spots also underscore the fact that SIPC's mission does not include making investors whole in the event of market losses or fraud.

SIPC President Michael Don said: "Our goal here is to reach literally millions of Americans in both English and Spanish in order to create the widest and clearest possible understanding of what it is that SIPC does and, just as importantly, what it does not do. SIPC is fully committed to using every investor education tool at its disposal to get the word out to investors. Television and radio PSAs are an important aspect of our 2002 outreach push, which goes far beyond anything that SIPC has done before in terms of communicating with investors on a mass scale."

The PSAs, which are written in plain English, are the latest in a series of aggressive steps taken by SIPC to improve investor understanding of its mission. In 2001, SIPC completely overhauled its Web site at www.sipc.org to make it easier for investors to understand the organization and how to file claims. Included in the new site is the advanced "SIPC Claim Center," a step-by-step guided process that allows SIPC liquidation claims to be filled-out online. (This plain-English process is only intended to simplify the claims completion process. All original signed forms and related attachments still must be received by the designated trustee overseeing a liquidation proceeding.) The easy-to-understand SIPC Web site also features such sections as "Why We Are NOT the FDIC," "What SIPC Covers . and What It Does Not" and "Avoiding the Most Common Claims Process Errors."

The SIPC Web site also features the "How SIPC Protects You" brochure. In 2001, the brochure was completely reworked to make it easier for investors to understand. The new brochure provides plain English answers to the seven most commonly asked questions about SIPC. It also emphasizes the need for investors to document their concerns in writing as soon as they suspect that their funds are being mishandled. The brochure is available on the SIPC Web site in both HTML and downloadable PDF formats.

ABOUT SIPC

SIPC made net advances totaling an estimated $112 million to approximately 179,500 investors in 2001, compared to just $23 million paid out to 1,148 investors in 2000. The payments made by SIPC to investors in 2001 were roughly twice the previous one-year record of $63 million in 1981. The 2001 total included the largest liquidation case ever handled in SIPC's history.

From its creation by Congress in 1970 through December 2001, SIPC has advanced $513 million in order to make possible the recovery of $13.9 billion in assets for an estimated 622,000 investors. SIPC estimates that more than 99 percent of eligible investors have been made whole in the failed brokerage firm cases that it has handled to date.

SIPC is an important part of the overall system of investor protection in the United States. While a number of federal, self-regulatory and state securities agencies deal with cases of investment fraud, SIPC's focus is both different and narrow: Restoring funds to investors with assets in the hands of bankrupt and otherwise financially troubled brokerage firms. The Securities Investor Protection Corporation was not chartered by Congress to combat fraud.

SIPC either acts as trustee or works with an independent court-appointed trustee in a fraud case to recover funds. The statute that created SIPC rules provides that customers of a failed brokerage firm receive all non-negotiable securities 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.

Recovered funds are used to pay investors whose claims exceed SIPC's protection limit of $500,000. SIPC often draws down its reserve to aid investors. Recovered funds also are used to replenish SIPC's reserve in the event that the reserve is tapped in the early stages of a liquidation proceeding.

FOR MORE INFORMATION, CONTACT:
Ailis Aaron, The Hastings Group,
(703) 276-1116 or aaaron@hastingsgroup.com