By NEMS Daily Journal
WASHINGTON, D.C. – Victims of the Stanford financial crash will learn in mid-September what an investor-backed fund will do to help them recover their losses.
Officials at Securities Investor Protection Corp. announced Friday its board of directors will announce on or about Sept. 15 whether it will help Stanford victims.
SIPC maintains a special reserve fund mandated by Congress to protect the customers of insolvent brokerage funds.
On June 15, the U.S. Securities and Exchange Commission asked SIPC to consider whether the Stanford matter was eligible for consideration under the Securities Investor Protection Act.
At that time, the SEC said some of the former Stanford investors fit its definition for assistance.
Some 30,000 Stanford investors worldwide lost nearly $8 billion in certificate of deposit purchases when the Stanford Group Co., operated by R. Allen Stanford, went belly-up in February 2009 under the weight of an SEC investigation.
The company was forced into a court-ordered receivership, which continues to liquidate Stanford properties for a victims’ pool.
SIPC may help investors when a brokerage firm fails, owing customers 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.