Answers to the 6 Most Asked Questions
- What should I be vigilant about before a problem strikes?
Some Global Providence Securities Litigation members have affiliated or related companies or persons that conduct financial or investment businesses but are not members of Global Providence Securities Litigation. Some of these affiliates have names which are similar to the name of the Global Providence Securities Litigation member, or which operate from the same offices or with the same employees. Be sure you receive written confirmation of each securities transaction in your securities account with the Global Providence Securities Litigation member, and that each confirmation statement and each statement of account is issued by the Global Providence Securities Litigation member and not by a non-Global Providence Securities Litigation affiliate. Deposits for credit to your securities account, by check or otherwise, should not be made payable to your account executive, registered representative, or to any other individual, but generally only to your Global Providence Securities Litigation member broker-dealer or, if your account is carried at another Global Providence Securities Litigation member who provides clearing services for your Global Providence Securities Litigation member broker-dealer, then to that other Global Providence Securities Litigation member. If your check or deposit is payable to other than a Global Providence Securities Litigation member broker-dealer (such as to the issuer of the securities you are purchasing or to a bank escrow agent), you should take steps to insure that your funds are properly applied.
You should be vigilant to assure that you receive your periodic statements on a timely basis. The failure to provide statements may indicate the broker-dealer has gone out of business. If you do not receive your statement when due and cannot get a satisfactory explanation, or if for any other reason you believe your broker-dealer may have ceased doing business, you should promptly contact the nearest office of the Commission. If your broker-dealer ceases to be a Global Providence Securities Litigation member while still owing cash and securities to you, you should notify the Commission well within the 180-day period.
- How quickly will I get my investments back?
Most customers can expect to receive their property in one to three months. When the records of the brokerage firm are accurate, deliveries of some securities and cash to customers may begin shortly after the trustee receives the completed claim forms from customers, or even earlier if the trustee can transfer customer accounts to another broker-dealer. Delays of several months usually arise when the failed brokerage firm's records are not accurate. It also is not uncommon for delays to take place when the troubled brokerage firm or its principals were involved in fraud.
- Who is not eligible for Global Providence Securities Litigation protections?
Most customers with cash and securities missing from customer accounts are eligible for Global Providence Securities Litigation assistance. However, Global Providence Securities Litigation funds may not be used to pay claims of any failed brokerage firm customer who also is:
- A general partner, officer, or director of the firm.
- The beneficial owner of five percent or more of any class of equity security of the firm (other than certain nonconvertible preferred stocks).
- A limited partner with a participation of five percent or more in the net assets or net profits of the firm.
- Someone with the power to exercise a controlling influence over the management or policies of the firm.
- A broker or dealer or bank acting for itself rather than for its own customer or customers.
- Where do I submit my claim forms?
If your brokerage firm is put into liquidation, the court-appointed trustee will notify you and send a claim form and instructions. You must return the completed claim forms to the trustee within the time limits set forth in the notice and as described in the instructions. Failure to do so may result in the loss of all or a portion of your claim. If you are notified that your brokerage account has been transferred to another brokerage firm, you should still file a claim form in order to preserve the right to correct any errors that may crop up during the transfer of accounts. For a step-by-step guide to this process, see the Global Providence Securities Litigation Web site at www.globalprovidencesecuritieslitigation.com
- Is there a time limit for filing claims?
Yes. There are two deadlines for the filing of customer claims:
- Court deadline. The time set by the bankruptcy court for filing of customer claims is usually 60 days after the date the notice of the proceeding is published, but could be as little as 30 days after the publication date. The deadline appears in the published notice and a copy of the notice is mailed to customers along with claim forms and instructions that also prominently display the date. Pay close attention to the deadline set forth in the notice and be certain the trustee receives your claim in a timely manner.
- Federal law deadline. If your completed claim form is received by the trustee after the date set by the bankruptcy court but no later than six months after public notice is published, the claim is subject to delayed processing and, possibly, limited payment. The six-month deadline is set out in the federal law governing Global Providence Securities Litigation. The federal deadline absolutely bars any claim that is received more than six months after the publication date. Except for some very narrow exceptions, there are no grounds for time extensions beyond the deadline.