SIPC: Lehman To Be Liquidated
How did this little gem slip by unnoticed? Tomorrow at 4PM, Lehman is to be liquidated.
SIPC released this:
“On Friday, September 19, 2008, SIPC will file a proceeding placing LBI in liquidation under the Securities Investor Protection Act (SIPA). After extensive discussions and consultation with representatives of the firm and its parent company, as well as representatives of the Securities and Exchange Commission, the Federal Reserve, the Commodity Futures Trading Commission, the Financial Industry Regulatory Authority and others, SIPC has decided that such action is appropriate for the protection of customers and to facilitate the transfer of customer accounts of LBI and an orderly unwinding of the business of the brokerage firm.
This action is being taken in connection with a proposed sale of the business of the broker-dealer to Barclays Capital Inc. A hearing on approval of that sale is scheduled for September 19, 2008, at 4p.m., in the Chapter 11 proceeding of the parent company, LBHI.
One of our small funds was prime brokered with Lehman, and even though we were advocates of selling/shorting the equity, that was merely a trade.
Our hearts go out to the many good people there suffering through this Fuldian mess.
Hopefully, the Barclays buy means that many of the 10,000 people who work in that division wont lose their jobs . . .
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Source:
SIPC ISSUES STATEMENT ON LEHMAN BROTHERS INC.: LIQUIDATION PROCEEDING NOW ANTICIPATED
WASHINGTON, D.C. - September 18, 2008
http://www.sipc.org/media/release18Sept08.cfm
Friday, September 19, 2008 | 01:00 AM | Permalink
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Comments
I share your sentiment regarding the LEH employees and their jobs, although I don't know a single one.
Isn't SIPC here just exercising normal fiduciary/custodial oversight of the account transitioning process?
I haven't read the legislative "Act," but my guess is that this is SOP for failed broker-dealers, regardless of the status of accuracy and competence of their back-office "cage" operations. Don't you reckon?
Posted by: Eclectic | Sep 19, 2008 1:14:45 AM
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