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Applications received before December 11, 2010 where potential avoidance actions were not pursued by the SIPA Trustee against an individual
As of November 15, 2016:
Applications received after December 11, 2010 where avoidance action defendants were dismissed by the SIPA Trustee
Applications still under review
On November 1, 2010, the SIPA Trustee announced the continuation of his Hardship Program.
The Hardship Program was initially established during the claims filing period to enable the SIPA Trustee to speed the determination of claims and the payment of allowed claims – via the SIPC advance of up to $500,000 – to BLMIS customers who were suffering hardship. The first phase of the Hardship Program closed in July of 2009.
During the first phase of the Hardship Program, the SIPA Trustee received many Hardship applications from former BLMIS customers who could have become the subject of avoidance action lawsuits prior to December 11, 2010. In the exercise of his discretion, the SIPA Trustee decided to forego potential avoidance actions against those BLMIS customers who submitted Hardship applications and were deemed to be suffering hardship. Because the SIPA Trustee wanted other parties to have the same opportunity, the Hardship Program was re-opened in November of 2010.
The SIPA Trustee has stated that while the law requires the pursuit of avoidance actions to recover customer property, he will not pursue actions against BLMIS accountholders suffering proven hardship. The SIPA Trustee urges customers to call the Hardship Program Hotline for more information and to use the Hardship Application to present their facts and circumstances if they believe they qualify. The SIPA Trustee has also extended the time for applicants to answer or otherwise respond to avoidance action complaints while their Hardship Applications are pending.
The SIPA Trustee can only make a determination to forego an avoidance action based on information shared by recipients.
The Hardship Standard
The SIPA Trustee will review the facts and circumstances presented by each hardship applicant. After reviewing the information presented, the SIPA Trustee will use his discretion to determine who qualifies for the Hardship Program. In many instances, the SIPA Trustee may require further disclosures and/or supplemental information be submitted to support the Hardship Application. Based on the information submitted, the SIPA Trustee will assess whether the hardship standard has been met, based on the following indicators: