The U.S. brokerage industry’s contingency fund, the Securities Investor Protection Corporation, reported record payouts in 2001.

SIPC made net advances totaling an estimated $112 million to approximately 179,500 investors in 2001, compared to just $23 million paid out to 1,148 investors in 2000. (All figures in U.S. dollars).

The payments made by SIPC to investors in 2001 were roughly twice the previous one-year record of $63 million in 1981. “Net advances” are money drawn from SIPC’s reserves in order to make investors whole at failed firms.

SIPC opened 12 new brokerage firm liquidation proceedings in 2001, compared to just five in the year 2000. The 2001 total included MJK Clearing Inc. of Minneapolis, the largest liquidation case in SIPC’s history. This is the highest number of brokerage liquidations since 1992, when 13 proceedings were initiated.

SIPC President Michael Don said: “Last year turned out to be an excellent example of what we mean when we say that SIPC is the investor’s first line of defense when a brokerage firm fails. It also was the case in 2001 that SIPC made major strides to make sure that we are doing everything we can to inform investors about the extent and limits of the protections that we provide under federal law.”