Customer Asset Protection Company
("CAPCO") was formed in late 2003 to provide securities
account protection for institutional and individual brokerage
accounts of certain securities firms over the protection
limits provided by the Securities Investor Protection
Corporation ("SIPC") in the United States.
The excess protection (sometimes referred to as "Excess
SIPC") was provided to the securities affiliates of CAPCO participants in the form of bonding coverage. CAPCO issued its first surety bond in early 2004. As of early 2009, all surety bonds issued by CAPCO had expired. Given that account protection under the CAPCO surety bonds is triggered only in the event
of the financial failure and liquidation of a participating
securities affiliate commenced prior to the 2009 expiration of the bonds, CAPCO account protection remains available only under the bonds issued to Lehman Brothers Inc. and Lehman Brothers International (Europe), and according to the terms of those bonds. No CAPCO account protection is available to customers of any other CAPCO participant or any non-participant broker. Account protection is available only if the customer's securities are not returned. This protection does not cover investment losses
in customer accounts due to market fluctuation or other
claims for losses incurred while these securities affiliates
remain in business. The protection is also not
triggered unless the net equity of the customer's account exceeds the limits
of account protection provided by SIPC. Other restrictions
apply as contained in the applicable bond.
All Bonds issued by CAPCO expired in or prior to
February 2009. Only customers of Lehman Brothers Inc. and Lehman Brothers International (Europe) may be beneficiaries under the Bonds because insolvency proceedings were commenced prior to expiration of the Bonds with regard to only those firms. Coverage provided by the Bonds is described in more detail in this web site.