WASHINGTON, D.C. October 2, 2001 - The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at bankrupt brokerages, announced today that the U.S. Bankruptcy Court in Minneapolis has approved a deal under which 175,000 investors at the financially troubled firm MJK Clearing, a subsidiary of Minneapolis-based Stockwalk Group, Inc. (Nasdaq: STOK), will be transferred to SWS Securities, Inc., a Dallas-based financial services company with assets of nearly $4 billion.
The transfer arrangement was worked out by SIPC and court-appointed trustee James P. Stephenson of the Minneapolis law firm Faegre & Benson. "We expect most customers to be able to access their accounts this week, many as early as Wednesday," Stephenson said. "Generally, individual customers with accounts up to $2 million dollars would have access to 100 percent of their accounts. A small number of large account holders will be able to access only a percentage of their account balances pending disposition of other assets of MJK Clearing."
Stephenson said customers should call their regular broker for more information. Information about the MJK Clearing Case will be available at SIPC's Web site at www.sipc.org. Customers should not contact the U.S. Bankruptcy Court, which has no further information about MJK Clearing.
The liquidation case is the largest ever handled by SIPC in its more than 30-year history. The largest previous brokerage shutdown handled by SIPC involved the firm Adler, Coleman Clearing Corp., headquartered in New York City, which had 65,000 customers and failed in February 1995.
"MJK was found to be out of compliance with federal rules requiring the maintenance of minimum capital levels," said SIPC General Counsel Stephen Harbeck. "SIPC is working closely with regulatory authorities to ensure that customers of MJK Clearing can obtain access to their accounts as soon as possible."
Based in Minneapolis, Minn., Stockwalk Group, Inc. is the parent company of MJK Clearing, Inc., which provides comprehensive clearing and brokerage services to correspondents across the country, and Stockwalk.com, Inc., an online trading company (AOL keyword: Stockwalk); and Stockwalk Group, Inc. common stock trades on the Nasdaq Stock Market under the symbol STOK.
MJK Clearing, Inc., is the parent company of Miller Johnson Steichen Kinnard, Inc., a full-service brokerage firm of approximately 400 investment executives in eight states. Miller Johnson Steichen Kinnard is a member of the Chicago Stock Exchange. Stephenson also noted that Miller Johnson Steichen Kinnard, Inc., is being sold by the trustee to the Stockwalk Group, Inc., under a separate agreement approved Tuesday by the Bankruptcy Court.