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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
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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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