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[0] HEARING OF THE CAPITAL MARKETS, INSURANCE AND GOVERNMENT SPONSORED ENTERPRISES SUBCOMMITTEE OF THE HOUSE FINANCIAL SERVICES COMMITTEE SUBJECT: SEC OVERSIGHT: CURRENT STATE AND AGENDA CHAIRED BY: REPRESENTATIVE PAUL KANJORSKI (D-PA) WITNESS: MARY SCHAPIRO, CHAIRMAN, U.S. SECURITIES AND EXCHANGE COMMISSION LOCATION: 2128 RAYBURN HOUSE OFFICE BUILDING TIME: 10:00 A.M. EDT DATE: TUESDAY, JULY 14, 2009 (Part 2).

Publication: Washington Newsmaker Transcript Database
Publication Date: 14-JUL-09 		Format: Online
Delivery: Immediate Online Access

Article Excerpt
Good morning, Chairman Schapiro.

Chairman Schapiro, there are an awful lot of people watching this hearing that aren't too interested in regulatory reform. They're not too concerned about resolution authority or the clearing of derivatives, and they aren't too worried about whether Congress complies with your request to increase funding for the SEC enforcement division. Madam Chairman, the thousands of now penniless victims of Bernard Madoff's Ponzi scheme are interested in just one thing -- making sure their government lives up to its word.

As you know, the Securities Investor Protection Corporation -- that's investor protection, indicating that it has something to do with protecting the investors. SIPC provides insurance of up to $500,000 to securities investors in the event that a broker-dealer fails.

It's been seven months now since the collapse of Mr. Madoff's fraud, and to date, of the over 15,400 claims that have been submitted, only 450 victims have received even a portion of their SIPC insurance. Part of the delay stems from the confusion over the eligibility requirements for SIPC coverage.

If you believe the law as interpreted by SIPC's general counsel Josephine Wang, SIPC is obligated to provide up to $500,000 per account for securities to any investor that believes that they owned securities in Madoff's investment statements. But if you believe Irving Piccard, the court-appointed trustee in the Madoff case, based...

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