SIPC: 23,000 Customers Get Claim Packages After $2 Million Theft at St. Louis Brokerage Firm

WASHINGTON, D.C. November 30, 2001 - The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at bankrupt brokerage firms, announced today that the trustee handling the case is sending claim notices to 23,000 individual investors who may have been affected in some way by the theft of at least $2 million at the St. Louis brokerage firm Eisner Securities, Inc.

Joseph E. Erwin, former manager at the Columbus branch of Eisner Securities, was found guilty in August of mail and wire fraud in the theft of more than $2 million from eleven Eisner Securities customers. On October 31, 2001, Harry O. Moline of the St. Louis based law firm Moline, Shostak & Mehan, LLC, was appointed to serve as trustee for the liquidation of the business of Eisner Securities.

Trustee Moline said: "Today, roughly 23,000 customer claim packages are going out to provide eligible investors the maximum relief of up to the $500,000 allowed under the Securities Investor Protection Act. We intend to process investor claims as quickly as possible and, as such, encourage all parties who receive the packages to turn them around as quickly as possible.”

SIPC President Michael Don said: “While this type of fraud is relatively rare, it is important for investors to know that SIPC is here as a safety net when they need us. The Eisner case is an excellent example of why Congress chartered SIPC to help out investors in their time of greatest need.”

SIPC estimates that as much as $3 million in funds may be required from its reserves in order to satisfy investor claims related to the Eisner Securities, Inc. proceeding.

The Eisner case comes on the heels of a record-setting case handled by SIPC. On October 2, 2001, SIPC announced a record payment of $177 million to restore stocks and cash to 175,000 investors due to a default by MJK Clearing, Inc. MJK Clearing, Inc., is the parent company of Miller Johnson Steichen Kinnard, Inc., a full-service brokerage firm headquartered in Minneapolis, Minnesota with 400 investment executives in eight states.