Claudia Slacik
Glen S. Fukushima
William S. Jasien

President & CEO
Stonehedge Global Partners

William J. Brodsky

Cedar Street Asset Management, LLC
Options Solutions, LLC

Alan Patricof

Co-founder and Chairperson
Primetime Partners

Daniel M. Covitz

Deputy Director, Division of Research and Statistics
Board of Governors of the Federal Reserve System

W. Moses Kim

Director, Office of Financial Institutions Policy
Department of the Treasury

Message from the Chair

In 2022, four new members joined the SIPC Board. We acknowledge the important contributions of the Board’s former Directors as we look forward to leading SIPC as a largely newly constituted Board. As intended by Congress, with two Directors from the general public, three from the securities industry, one from the Federal Reserve and one from the U. S. Treasury, the interests of these different sectors will continue to have a voice on the Board and in the operation of SIPC.

Due to the pandemic, the SIPC staff worked remotely for the first half of the year and returned to the office, on a hybrid basis, in early June. Throughout, the staff collaborated closely with the trustees and their staffs on the two liquidations that remained in 2022. The liquidation of Lehman Brothers Inc. which began in 2008 with much commotion ended quietly this year. The success in that liquidation was matched in the liquidation of Bernard L. Madoff Investment Securities LLC which, as in prior years, achieved impressive recoveries for the victims of that firm.


Lehman Brothers Inc.

On September 22, 2022, the United States Bankruptcy Court for the Southern District of New York entered an order discharging the Trustee for the liquidation of Lehman Brothers Inc. and closing the liquidation proceeding. The case, which began during the 2008 financial crisis, ended with the return of more than $105 billion in assets to customers with more than 111,000 accounts. The enormity of the liquidation and the complexity of the issues that reached across the globe cannot be overstated. Much credit belongs to the Trustee and his staff, supported by SIPC personnel, in resolving claims to assets on a scale not previously seen in a liquidation under the Securities Investor Protection Act (SIPA). In addition to all customers with valid claims being made whole, $9.7 billion was recovered for unsecured general claimants representing a recovery rate of approximately 41%.

Bernard L. Madoff Investment Securities LLC

Ground-breaking decisions were rendered in the Madoff liquidation in 2022 that benefitted the Madoff victims and added to the growing body of case law under SIPA.

At the end of 2022, more than $14.55 billion had been recovered for customers, with more than $14.33 billion distributed. A customer with an allowed claim of up to $1.69 million was made whole. Other customers with larger allowed claims received 70.452% of the net amounts custodied with the Madoff firm. With over 1,000 cases initiated by the Trustee for the recovery of customer assets, roughly 105 remain in litigation. No customer assets or recoveries are used to pay the administrative expenses of the proceeding which are financed wholly by SIPC.

Consistent with SIPA, over the past year, SIPC worked closely with the SEC and FINRA regarding possible problem firms. Under the oversight of FINRA, three firms ceased operation, with minimal disruption to customers. While SIPC was kept closely apprised and stood ready to intervene if needed, the ability of the firms to resolve their operations, appropriately left SIPC as the remedy of last resort.

Looking Ahead

The fact that no new SIPA cases have been brought in recent years continues to be a testament to the effectiveness of the SEC’s financial responsibility requirements and to regulatory bodies’ enforcement of them. The absence of new cases allowed SIPC to continue to focus on modernizing its processes. The transition to the cloud of SIPC’s services and applications moves closer to completion. A broker portal which SIPC had hoped to launch in 2022 but which continues under development, will facilitate the filing of assessment forms by SIPC members and the payment of assessments to SIPC. On the back-end, the system will facilitate SIPC’s processing of information and payments.

A central focus of SIPC always is to ensure the strength and preparedness of the SIPC Fund. The Fund remains strong as it progresses steadily toward its target of $5 billion. In this regard, much recognition is owed to the SIPC membership that consists of almost all registered securities broker-dealers and that pay assessments to SIPC. Through their support of SIPC, the readiness of the members to ensure that investor confidence is not lost when a firm fails has been steadfast.

As the threat of the pandemic recedes, SIPC looks forward to reuniting with its foreign counterparts in person. Meetings with entities located abroad that have a similar role to that of SIPC provide an opportunity to exchange information and lay the groundwork for cooperation in the event of a cross-border insolvency. An in-person meeting in Budapest with foreign counterparts is scheduled for 2023.

Finally, no message for the year would be complete without giving thanks where due. Through the support they have given in two of the largest liquidations in SIPC’s history, to the hard work and initiative they have shown in moving SIPC forward, to their unwavering belief in SIPC’s mission, the SIPC staff is, in a word, exceptional. SIPC extends its heartfelt thanks to the staff. SIPC also expresses its appreciation to the SEC and FINRA for their continued support and collaboration.

Claudia Slacik