In New York, the Securities Investor Protection Corporation advances committed to customers in the liquidation following the Madoff fraud has topped half a billion dollars, with a total of 2,861 direct customer claims determined to date.
The SIPC has also announced that advances committed in the Madoff proceeding now exceed the total of all advances made in the 321 prior liquidations handled since the act creating the SIPC was passed in 1970.
The $530 million in committed advances for the allowed customer claims determined so far is a subset of the total allowed claim figure of about $4,440 million.
The SIPC president said: “The fact that one liquidation proceeding has now involved more in advances from SIPC’s reserve than all 321 of the liquidations that preceded it is a testament to both the wisdom of those who created this safety net for investors and the resiliency of the safety net itself.”
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.