WASHINGTON, D.C. – May 16, 2024 - The Securities Investor Protection Corporation (“SIPC”) re-issues its warning to investors and the general public of scams involving the misuse of SIPC’s name, inauthentic corporate seal, and officer or employee signature.
SIPC protects customers of failed securities brokerage firms in liquidation under the Securities Investor Protection Act. If a SIPC-member brokerage firm fails and if customer securities or cash are missing, SIPC will work to recover them for distribution to customers.
Recently, SIPC learned of instances in which fraudsters, under the guise of a financial institution, presented investors with documents bearing SIPC’s inauthentic corporate seal and the falsified signature of a SIPC officer. The fraudster corresponded with the investors by e-mail, using an e-mail address that mimicked the name of a real financial institution. The fraudster’s objective was to deceive the investors into believing that they were dealing with the actual firm acting with or under the cooperation, approval, or authority of SIPC. The fraudster used this hoax to request payment from the investor in order to release funds, file a claim, or otherwise engage with the fraudster to provide personal information. The representations made were false, and the use of SIPC’s name, inauthentic corporate seal, and officer or employee signature, were fraudulent.
Investors should be aware of the following:
- Customers will never be asked by SIPC, or an entity affiliated with SIPC, to pay any amount to assist in the recovery process in the liquidation proceeding or to process customer claims.
- Pending customer protection proceedings are listed on SIPC’s webpage at https://www.sipc.org/cases-and-claims/open-cases. The webpage also contains information about each case and contact information for the trustee overseeing the liquidation.
- A SIPC liquidation proceeding always takes place under the supervision of a United States Bankruptcy Court.
- Only the court-approved trustee and counsel in the proceeding generally are authorized to recover customer property.
- The trustee and counsel are paid for their services with brokerage firm funds or, if such funds are unavailable, out of SIPC funds. Such compensation is subject to approval by the Bankruptcy Court.
- All amounts recovered for customers are shared pro rata by customers and distributed in the liquidation proceeding, with court approval.
- In a liquidation, SIPC does not “commission” individuals or businesses to recover assets for any individual customer.
Should you have a question about a notice or unsolicited call that you receive that involves SIPC, or if you are the subject, or suspect that you may be the target, of such a scam, or otherwise become aware of a misuse of SIPC’s name, SIPC asks that you report the fraud or potential fraud to SIPC by e-mail at asksipc@sipc.org or by telephone at 202-371-8300.