Bankruptcy Basics ::

Securities Investor Protection Act (SIPA)

Although the Bankruptcy Code provides for a stockbroker liquidation proceeding (11 U.S.C. § 741 et seq.), it is far more likely that a failing brokerage will find itself involved in a proceeding under the Securities Investor Protection Act of 1970 ("SIPA") (15 U.S.C. §§ 78aaa et seq.), rather than a Bankruptcy Code liquidation case.

• Overview
• History
• SIPA
• Bankruptcy Liquidation versus the SIPA Liquidation in Bankruptcy Court
• Role of the District Court
• Removal to Bankruptcy Court
• Liquidation Proceedings
• Powers of the Trustee
• Claims
• Distribution
• Advances
• Direct Payment Under SIPA Outside the Bankruptcy Court
• Role of Securities and Exchange Commission
• Compensation in a SIPA Action