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- "S t e phm H a rbeck <sharhsckosipc~> P 09A3I2im8 6329 PM

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"Hsyman, Wllam H cc "Philip W Caelum@ ~carduck@iipc.mp, Jaaqzhirm Wm g <jwang@sipcrag>,

Lehmaa amer

Members of the Board.

At the request of the Division af Maxket Regulation of the SEC, SIPC will prepare

pleadings this evening to initiate a SIPA case against Lehman Brathexs. The SEC still prefexs a
"self-liquidation", but the cuxxent thinking is that the 6rm may, against the desires of the SEC ~ f ile a Chapter hquidation as early as Sunday. Puxsuant to SIPC's Bylaws, Chairman 7

B~ l o has authorized a SIPA fihng if it becomes necessary.

I'or technical reasons, a bxokexagefixm may only use Subchapter HI of Chapter 7. SIPC
and the SEC may take the position that such a fling is damaging to customexs, because that

Subchapter requires the liquidafian of am securities positions. SIP A, on the other hand, requires
the delivexy of the securities positions v berm' p r a cticable

The situation is both very Suid and mry "nan-public" Should it become nec~ take actian, Jim Giddens of Hughes Hubbard and Reed wml sexve as trustee and counsel

to