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SIPC Accountability FINAL 03-01

SIPC Accountability FINAL 03-01

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Published by ibkent
A primer on how the Madoff fraud shows that no investor is really protected.
A primer on how the Madoff fraud shows that no investor is really protected.

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Published by: ibkent on Mar 02, 2011
Copyright:Attribution Non-commercial

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03/02/2011

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and its Accountability to theAmerican Investor
Presented by:
 
CONGRESS IDENTIFIES A NEED FOR SIPA SIPC’s MISSION DEFINED IN 1970
Bankruptcies of brokerage houses “may lead to loss of customers’ funds andsecurities with an inevitable weakening of confidence in the U.S. securitiesmarkets.”
 
“lessened confidence has an effect on the entire economy...”
 
“similar, in many respects, to…the Federal Deposit Insurance Corporationand the Federal Savings and Loan Insurance Corporation.”
 
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SIPC: UNDERFUNDED  AND OVERWHELMED
The Stanford, Petters, and Madoff scandals have revealed that:
 SIPC  has long ignored its Congressional mandate to protect the investor.SIPC has consciously elected to underfund itself over the years which has benefited its broker-dealermembership.  From 1995 to 2008, it assessed each member broker-dealer a mere $150 per year for SIPCcoverage.   SIPC’s consistent underfunding  has now left it incapable of responding to the kind of brokerage failure it was designed to address.Trustees have for the first time ever in a SIPA proceeding tried to use “clawback” and re-victimize thesame victims that SIPA intended to protectIf allowed to proceed, all US tax payers will be victimized by “clawback” as billions of dollars in taxes arerefunded while trustees are first in line for payment.

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