The Securities Investor Protection Corporation (SIPC) had its origins in the difficult years of 1968-70, when the paperwork crunch, brought on by unexpectedly high trading volume, was followed by a very severe decline in stock prices. Hundreds of broker-dealers were merged, acquired or simply went out of business. Some were unable to meet their obligations to customers and went bankrupt. Public confidence in the U.S. securities markets was in jeopardy.
Congress acted swiftly, passing the Securities Investor Protection Act of 1970, 15 U.S.C. § 78aaa et seq. (SIPA). SIPA's purpose is to protect customers against certain types of loss resulting from broker-dealer failure and, thereby, to promote investor confidence in the nation’s securities markets.
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Now
Present Day
Without SIPC, investors at financially troubled brokerage firms might lose their securities or money forever. Although not every investor or transaction is protected by SIPC, no fewer than 99 percent of persons who are eligible get their investments back with the help of SIPC. From its creation by Congress in 1970, SIPC advanced $3.6 billion in order to make possible the recovery of $143.8 billion in assets for an estimated 773,000 investors.
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2023
The Trustee for the Bernard L. Madoff Investment Securities LLC liquidation had recovered $14.556 billion, and distributed nearly $14.33 billion. Any customer with a net asset value of up to approximately $1.705 million was made whole. Customers with larger claims have received over 70.704% of the net amount entrusted to the Madoff firm.
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2022
By the closing of Lehman Brothers, Inc., the Trustee achieved a 100% distribution to LBI’s customers consisting of $105.7 billion distributed to more than 111,000 customers through the account transfer and customer claims processes. The Trustee also recovered and distributed $9.7 billion to general unsecured claimants representing a recovery rate of approximately 41% on general unsecured claims.
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2020
SIPC Marks 50th Anniversary with Special Report and Video
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2018
SIPC announces the availability of an electronic filing system for customers and other claimants in the event of a brokerage firm failure.
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2016
The Trustee for the MF Global Inc. liquidation closes the case with a 100% distribution to customers and commodities claimants, and a 95% distribution to general creditors.
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2014
The Trustee for the Lehman Brothers Inc. liquidation completes a 100% distribution to customers, and the Trustee for the Bernard L. Madoff Investment Securities LLC liquidation surpasses $10.5 billion in recoveries.
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2011
October 2011
MF Global Inc. fails, beginning the 8th largest bankruptcy in history. SIPC steps in to protect securities customers.
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2010
Cash Protection Increased
The Dodd-Frank Wall Street Reform and Consumer Protection Act passes. It increases SIPC’s line of credit with the Treasury to $2.5 billion and increases the protection of cash in a customer’s account to $250,000, with a possible adjustment for inflation.
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2009
SIPC Board of Directors raises the target balance of the SIPC fund to $2.5 billion.
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2008
September 2008
Lehman Brothers Inc. fails as part of the largest bankruptcy in U.S. history. SIPC steps in to protect customers. The Trustee transfers more than 110,000 customer accounts, containing more than $92 billion in customer assets, within weeks.
December 2008
Bernard L. Madoff confesses to the largest Ponzi scheme in history. SIPC steps in to protect customers of Bernard L. Madoff Investment Securities LLC.
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2007
For the first time in SIPC history, SIPC is not called upon to initiate a customer protection proceeding during a calendar year.
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2001
In the liquidation of MJK Clearing, Inc., the largest at the time, SIPC transfers nearly 175,000 customer accounts, involving customer assets exceeding $10 billion, in approximately one week.
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2000
291 Proceedings in 30 Years
SIPC celebrates its 30th anniversary. In its first 30 years, SIPC protects customers in 291 customer protection proceedings.
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1996
The SIPC Fund reaches a $1 billion balance, ahead of schedule.
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1995
The liquidation of Adler, Coleman Clearing Corp. is initiated, creating, at the time, the largest SIPA liquidation in number of accounts and value of customer assets. SIPC rapidly transfers accounts of over 50,000 customers to other broker-dealers.
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1992
Fund Target Raised
The SIPC Board of Directors raises the target balance of the SIPC fund to $1 billion on the advice of an industry task force.
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1983
SIPC advances over $42 million to the Trustee in the Bell & Beckwith liquidation, the most costly SIPC case up to this point.
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1980
Protection Increased
The level of protection is raised to $500,000, including up to $100,000 for cash.
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1978
The first substantive amendments to SIPA are passed. Customers are protected up to $100,000, with a ceiling of up to $40,000 for cash.
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1975
SIPC celebrates its fifth anniversary. In SIPC's first 5 years, SIPC protects customers in 117 customer protection proceedings.
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1973
Weis Securities, Inc. is the first liquidation involving a New York Stock Exchange member.
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1971
Initial SIPC Fund totals $77.6 million, comprised of member assessments of $9.6 million, the transfer of $3 million from the American Stock Exchange, Inc. trust fund, and confirmed lines of credit totaling $65 million.
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1970
SIPC Is Created
Securities Investor Protection Act (SIPA) passes and SIPC is created. Each customer is protected up to $50,000, including a ceiling of $20,000 for cash claims.