In the same statute, the enforcement of actions of Securities and Exchange Commission ("The Commission") is defined as follows: "In the event of the refusal of SIPC to commit its funds or otherwise to act for the protection of customers of any member of SIPC, the Commission may apply to the district court of the United States in which the principal office of SIPC is located for an order requiring SIPC to discharge its obligations under this chapter and for such other relief as the court may deem appropriate to carry out the purposes of this chapter."
This is not currently happening, in spite of numerous phone calls, letters, and meetings with the Commission by victims and their attorneys.
As a result, the members of the Coalition have written to the members of the subcommittees to ask their intervention to ensure that the Commission act in good faith according to the above law.
Some of the letters sent include these words from the victims:
"In the face of the massive losses of innocent Americans whose only mistake was assuming that the SEC was competent and honest, the SEC has allowed SIPC to further devastate investors by refusing to pay customer claims "promptly" as required by the statute and in accordance with their last statements from BLMIS, as required by Securities Investor Protection Act ("SIPA") definition of "net equity"."
"We seek cooperation from your office to ensure justice for those who have been wronged and to restore confidence in the regulatory authority of the United States. Without your support, thousands of victims will know the failures of not only the SEC, but also of their elected representatives."
"Restoration of public confidence in regulatory institutions is critical and voters need to be reassured that congress can assist in that restoration. To assist us and the thousands of impacted Madoff investors, we are asking for you to intervene and ensure that the SEC enforces SIPA against SIPC. The statutory scheme enacted by Congress requires the financial services industry to fund investor losses up to $500,000 per investor. The fact that the Madoff losses are in the tens of billions of dollars does not justify relieving the industry of responsibility to fund SIPC insurance. And, please recall that the fraud, had it been stopped by the SEC in 1992 would have been considerably less in value and there would have been considerably less victims involved. Again, the failure of the SEC has a dramatic role in the vast devastation."
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