§78fff–1 Powers and duties of a trustee

Summary

Gives the trustee the same powers and legal control over the broker and its property that a bankruptcy trustee has, including the ability to undo certain preferential payments. With SIPC approval and without needing court permission, the trustee can hire and pay any staff or outside experts needed, use SIPC employees, and margin and keep customer accounts for the purpose named in section 78fff–2(f). The trustee must follow the same duties as a chapter 7 bankruptcy trustee (including special duties for commodity brokers), but does not have to sell securities for cash. The trustee should return securities to customers when practical, and with SIPC approval may pay or guarantee some debts of the firm if the securities expected to secure that payment appear to be worth at least the same amount. The trustee must file written reports to the court and to SIPC like a chapter 7 trustee, showing progress in distributing cash and securities in a form and detail the Commission requires and with regard to the requirements of section 78q. The trustee must quickly investigate the firm’s business and finances, question officers and others, report any fraud or misconduct and possible claims, and give a written investigation statement to SIPC and others the court names.