i worked at sipc for 34 year. sipc has no role in the investigation of the firms.when sipc is informed that a brokerage firm has failed, we institute a customer protection proceeding and refer it to the bankruptcy court. customers of brokage firms are protected within statutory limits. the first such source of protection is a pro rated distribution of customer property as professor coffee noted this morning, that makes ate zero sum game. sipc can supplement customer property by as much as $500,000 per customer with a limit of $100,000 for cash. sipc has overseen the return of approximately $160 billion to customers and has advanced more than $323 million prior to the madoff case to do so. about 11 months i appeared before you to report on the lehman brothers and i would refer you to my written report which i think is subtannial. in the madoff case, unlike the lehman case, a transfer of accounts was simply impossible. through the claims process, the following is the status in claims. the trustee is allowed $4.6 billion worth of claims. that represents returns to 1,6

i worked at sipc for 34 year. sipc has no role in the investigation of the firms. when sipc is informed that a brokerage firm has failed, we institute a customer protection proceeding and refer it to the bankruptcy court. customers of brokage firms are protected within statutory limits. the first such source of protection is a pro rated distribution of customer property as professor coffee noted this morning, that makes ate zero sum game. sipc can supplement customer property by as much as $500,000 per customer with a limit of $100,000 for cash. sipc has overseen the return of approximately $160 billion to customers and has advanced more than $323 million prior to the madoff case to do so. about 11 months i appeared before you to report on the lehman brothers and i would refer you to my written report which i think is subtannial. in the madoff case, unlike the lehman case, a transfer of accounts was simply impossible. through the claims process, the following is the status in claims. the trustee is allowed $4.6 billion worth of claims. that represents returns to 1,

sipc symbol in the window has to mean something. as i said, it has to mean something with you make an investment in the united states system. it go after these investors who lost everything now violates most people's sense of fairness on a consistent level. how can they be held to a higher standard than professional analysts at the sec? it has been determined that investors who drove more money than they racially put in an -- who took out more money than they initially put in an are not entitled to it. the sipc is to honor legitimate expectations of customers and instill confidence in our capital markets. it is important to provide sipc protection of the five and a thousand >> not only for the victims of this brought -- of $500,000 not only for the victims of this fraud but for the confidence of the securities market in the united states. i look for to that testimony and an appropriate conclusion. thank you. >> and now i ask unanimous consent -- [inaudible] that congressman ellison provide an opening statement. if there are no objec

>> the sipc member may have, but the sipc member with respect to actual customer assets custodied them at a clearing brokerage firm and people who had the assets at the clearing firm now have them all back. the folks who are missing -- and i met with the receiver last weekend to discuss this mat we are them and i have had extensive discussions with the s.e.c. on this subject. and the problem is since it protects the custody function and since they have physical possession of the c.d. that is the security, what you would be giving them back is the initial purchase price of a fraudulent security and that has never been the law. >> i understand, but those that bought the securities at the offshore banks, in their place of business or on their stationery, do they indicate to the customer that they were insured by your corporation? >> i don't know the answer to that. >> i think it would be sort of important that you do know that. >> on the facts of this case, no, because the the determining factor -- go ahead, i'm sorry. >> why isn't it important for you to find out whether or not there are

how far should the sipc insurance reach? and tax wise, when tens of th -- when somebody takes those illusory gains and the carry- back, that might give the least some recovery. those are the three baker policy -- those are the three big policy questions. ms. lankford, how did you get into the meat off network -- ms. langford, how did you get into the bernie madoff network? >> by looking for a vehicle -- i had just sold winehouse -- sold my house, and it was my retirement. i asked a friend, i said i wanted something safe, liquid, and diversified. and he said, hands down, the best place to put your money. so i entered into it that way. >> so you were a direct investor with may off -- with bernie madoff? >> no, in direct. it was a limited partnership. technically -- it was not technically a retirement account, but it was my retirement money. >> ok, thank you. one more point, to mr. coffee's statement, mr. kanjorski's bill that we will hear today and tomorrow and friday does, i think that $10 million level, separate custodial ac

it is clearly spelled out on sipc's web site, even today, yet sipc decided it doesn't insure the first $500,000 in the accounts, it only insures the net investment going through generations of investors because of a lot of my clients are people whose grandparents invested in madoff. and what sipc is doing is going back three generations to net out investments and they are discounting inherited balances unless the investor can come forward and prove how much the grandfather deposited into the account in 1970. no one keeps records going back that far. and now where did the government put people on notice that if they want to happen sipc claim, they have to keep their records going back 30 and 40 years. the sec that tsunami was sipc's defiance of net equity. we know from mr. connolly testimony, posted yesterday on the web site, that the sec does not feel it is bound by the statute. american citizens have to trust in the loss. if the statute gives them a promise of insurance, they have to rely upon that. and how can we as a country instill confidence in the capital markets, if we do not st

so sipc is created and as you pointed out for a long period of time because you thought you had ample funds, these brokers were only paying $150 a year. for 19 years they were paying $150 a year. you have increased it recently because of the madoff scandal, but i have one question, which is, i think the insurance product is out of date. and i think that it's very important for you to go back and reformulate an insurance product that reflects the way people invest today. and people invest today through mutual funds and hedge funds and if you're going to offer an a product that has no relevance to today but had relevance to 1970, i don't believe you're doing your job. secondly, i have a question for you, which is if you are charging one quarter of 1% of the revenue, then that revenue that's generated by a broker to refill the fund, what would prevent you from coming up with a 1/8 of 1% of revenue to create a fund to pay the madoff victims some kind of compensation? there's nothing that precludes you from doing that, is there? >> it would have to be statutory, congresswoman. >> you were