Receive Additional Delivery from Customer Property, if Available, if Your Net Equity is Over the SIPC Limits
Customers who have claims in excess of $500,000 may be eligible to receive an additional distribution. This distribution will be based on whether the Trustee has any customer property from the brokerage firm. Any distribution of customer property will be made pro rata on the basis of your net equity claim. If your claim is still not satisfied, you will have a general creditor claim for the overage.
Please note that if your claim was satisfied in full by the SIPC protection, you will not receive a distribution of customer property.
As an example, if the Trustee is able to recover 40% of customer assets and 60% of customer assets are missing, customers would be treated as follows:
Customer A has a claim for securities valued at $250,000. Customer A would receive his securities (or $250,000 in cash). 40% of the value would come from customer assets and 60% from funds advanced by SIPC.
Customer B has a claim for securities valued at $1,000,000. Customer B would receive securities valued at an amount of $500,000 (or $500,000 in cash) from funds advanced by SIPC. Customer B would also receive a distribution from customer property valued at $400,000 (40% of $1,000,000). In total, Customer B would receive $900,000, and would have a general creditor claim for the remaining $100,000.
All "customer name securities" held by the brokerage firm are returned outright to customers.
