The Dodd-Frank Act gives the Securities Investor Protection Corp. a new role in unwinding failed financial companies.
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“Although the FDIC calls the shots in the new regime, the agency must appoint the SIPC — which is not a government agency — as a trustee for liquidating broker-dealer subsidiaries of firms in receivership,” writes American Banker’s Joe Adler.
The SIPC is "normally working for a bankruptcy court, but instead they're going to be working for the FDIC," said Christopher Whalen of Tangent Capital.
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