Liquidation Proceedings for New Orleans Area Brokerage Firm Undertaken by Securities Investor Protection Corporation

SIPC Appointed By Court to Act as Trustee; Investor Losses Could Reach $2 Million.

WASHINGTON, D.C. - March 5, 2008 – The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, announced today that it is liquidating Hanover Investment Securities, Inc., of Madisonville, Louisiana, under the terms of the Securities Investor Protection Act (SIPA).

The liquidation of the New Orleans area broker-dealer is the first such proceeding to be initiated by SIPC in 14 months.

SIPC General Counsel Josephine Wang said that an inquiry into Hanover began after a complaint was received by SIPC and then referred to the Financial Industry Regulatory Authority (FINRA) for investigation. FINRA's investigation revealed that a former principal of the firm had misappropriated investor funds and converted them to his own use before committing suicide on February 7, 2008. Investor losses may be as much as $2 million.

On February 28, 2008, on an application by SIPC, the U.S. District Court for the Eastern District of Louisiana appointed SIPC to act as trustee for Hanover and the law firm of Lemle & Kelleher, LLP, to act as counsel to the trustee.

As trustee, SIPC immediately secured the premises and books and records of Hanover. SIPC will seek permission from the Bankruptcy Court to publish notice of the commencement of the proceeding and to mail claims materials to customers and creditors of the broker-dealer, Wang said. Information about the case also will be made available on the Web at

The liquidation proceeding is docketed as case number 08-01021 in the United States Bankruptcy Court for the Eastern District of Louisiana, where it has been assigned to Judge Jerry A. Brown.