President & CEO
Stonehedge Global Partners
Chairman
Cedar Street Asset Management, LLC
Chairman
Bosun Asset Management
Co-founder and Chairperson
Primetime Partners
Deputy Director, Division of Research and Statistics
Board of Governors of the Federal Reserve System
Director, Office of Financial Institutions Policy
Department of the Treasury
Message from the Chair
In 2024, SIPC continued to focus on being prepared in the rare event of a brokerage failure. Critical to that preparation is ensuring that the SIPC Fund is adequate for the protection of brokerage customers. Although under the Securities Investor Protection Act (SIPA), SIPC may borrow up to $2.5 billion from the United States Treasury through the Securities and Exchange Commission (SEC), SIPC has never drawn upon the Government line of credit and it expects not to have to do so. Toward that end, a focus this year has been on laying the groundwork for raising sizeable sums of money if needed. Furthermore, as the Fund reaches its $5 billion target, as is likely in 2025, SIPC will commission a study to review the adequacy of the Fund for its current and future needs. By being forward-looking, SIPC remains confident that it is well-prepared for the future and able steadfastly to withstand any financial storm.
Madoff
The recoveries for the benefit of customers continued to be remarkable in 2024. By the end of the year, a total of over $14.7 billion had been collected for customers of Bernard L. Madoff Investment Securities LLC (BLMIS). A 15th distribution amounting to approximately $78 million was made to BLMIS customers this year, bringing the total distributed, together with SIPC advances of $591.8 million, to $14.5 billion, and resulting in any customer owed $1.7 million being fully satisfied.
$842 million continues to be withheld by the Trustee for the liquidation of BLMIS pending the outcome of litigation. Notably, the more than 1000 lawsuits initiated in the liquidation proceeding for the recovery of customer funds has been reduced to 76. Further benefiting customers is that all expenses of administering the liquidation proceeding are paid for with advances from SIPC and no customer monies are used for that purpose.
The commendable persistence and tireless efforts of the BLMIS Trustee, his counsel and consultants, supported by the SIPC attorneys and staff, are key to the recoveries achieved for customers and will continue into 2025.
Modernization
SIPC was pleased to have launched its broker portal in November 2023. Since the launch, this challenging undertaking has yielded many benefits, enabling SIPC to transition from largely manual and paper driven processes to more efficient automated ones. Users of the portal are now able electronically to submit forms and required filings with SIPC. Assessment payments are made through the portal and a system has been created for users to communicate electronically with SIPC’s Membership staff. The back-end of the system generates useful reports for SIPC’s Member Services and Finance Department.
Additional tools or features that will make the portal even more user friendly and responsive to users’ and SIPC’s needs will continue to be developed into 2025.
Website
Ensuring that investors are aware of the SIPA protection available to them, and its limits, is important. A central means of sharing information is the SIPC website (www.sipc.org). SIPC has begun the process of refreshing and updating its web site to ensure that the site information is as comprehensive, current, and understandable to investors and other users as possible.
Cybersecurity
As SIPC continues to automate and to modernize its systems and processes, safeguarding confidential information and sensitive data in SIPC’s possession remains a priority. The safety of SIPC’s systems and network is a foremost consideration in any initiative that SIPC undertakes. As a member of the Financial and Banking Information Infrastructure Committee, SIPC stays informed on significant issues relating to cybersecurity and critical infrastructure within the financial services sector.
With Thanks
SIPC is grateful for the ongoing support from its broker-dealer members; the securities regulators including, in particular, the SEC and FINRA who partner with SIPC; investor and industry groups; and above all, the SIPC staff who remain committed to SIPC’s mission of investor protection. I warmly extend my personal thanks to the management and staff for their continued commitment to SIPC.
As SIPC moves into the New Year, it stands strong and committed to fulfilling its mission of promoting investor confidence in the safety and soundness of our nation’s capital markets.
Claudia Slacik
Chair