Where’s My Money?

As the dust begins to clear in the aftermath of the Lehman Brothers bankruptcy, shaken investors who have accounts with the giant brokerage firm may wonder whether they too have been wiped out. Rest easy, say officials of the Securities Investor Protection Corp., who recently reassured Lehman clients that their accounts are safe.

As the dust begins to clear in the aftermath of the Lehman Brothers bankruptcy, shaken investors who have accounts with the giant brokerage firm may wonder whether they too have been wiped out. Rest easy, say officials of the Securities Investor Protection Corp., who recently reassured Lehman clients that their accounts are safe.

The SIPC noted that brokerages are required to keep investors account assets separate from corporate accounts and that Lehman followed this procedure properly—no client assets held by Lehman appear to be missing. The SIPC also stressed that its role in protecting investor’s assets from bankruptcy or fraud did not shield them from market losses like those they may have suffered during the market’s mega-point meltdown after the Lehman bankruptcy.

Officials from the Securities and Exchange Commission and the Financial Industry Regulatory Authority, a non-government securities regulator, are overseeing the transfer of accounts held by Lehman to other SIPC-insured brokerages. Once the transfer is completed, the Lehman brokerage unit is expected to close and clients can access their accounts at the new brokerages. Lehman investors with questions about their accounts can call FINRA at (301)590-6500 or e-mail the SEC at help@sec.gov.

If any Lehman investors had suffered losses because of the bankruptcy, the SIPC would have made them whole out of its own cash reserves, up to a limit of $500,000, which includes up to $100,000 in cash claims. In the Lehman case, however, this will not be necessary.