SIPC EXPOSES PHONY "LOOK-ALIKE" WEB SITE,
REFERS SCHEME TO FBI AND SEC FOR FURTHER ACTION
WASHINGTON, D.C. - January 29, 2004 - The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund mandated by Congress to protect the customers of insolvent brokerage firms, said today that it has asked the Federal Bureau of Investigation (FBI) and the Securities and Exchange Commission (SEC) to investigate a "look-alike" Web site for a fictitious organization, the International Brokerage Association, that closely mimics the official SIPC Web site's appearance, content and functions.
SIPC officials said that the phony Web site apparently was being used to encourage investors to part with their money and securities under the guise of doing business with a non-existent Hong Kong brokerage firm.
SIPC President Stephen Harbeck said: "The Web site that we are concerned about is a complete fabrication and should not be relied upon by any investor in the U.S. or overseas as an information resource. These people have literally hijacked the look, feel and content of the SIPC Web site with the apparent motive of confusing investors into doing business with a phony brokerage firm. We have asked the FBI and SEC to investigate this matter and intend to use every available means to shut down this Web site and to make sure that the parties involved are held responsible for this scheme."
For more information about SIPC's December 11, 2003 warning on brokerage identity theft, go to http://www.sipc.org/Media/NewsReleases/Release11Dec2003.aspx.
From its creation by Congress in 1970 through December 2001, SIPC has advanced $513 million in order to make possible the recovery of $14.0 billion in assets for an estimated 622,000 investors. SIPC estimates that more than 99 percent of eligible investors have been made whole in the failed brokerage firm cases that it has handled to date.
SIPC is an important part of the overall system of investor protection in the United States. While a number of federal, self-regulatory and state securities agencies deal with cases of investment fraud, SIPC's focus is both different and narrow: Restoring funds to investors with assets in the hands of bankrupt and otherwise financially troubled brokerage firms. SIPC was not chartered by Congress to combat fraud.
SIPC either acts as trustee or works with an independent court-appointed trustee in a fraud case to recover funds. The statute that created SIPC rules provides that customers of a failed brokerage firm receive all non-negotiable securities 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.
FOR MORE INFORMATION, CONTACT: Ailis Aaron, The Hastings Group, (703) 276-1116 or email@example.com.
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