15 U.S.C. § 78fff–1 — Powers and duties of a trustee

(a) The trustee's powers The trustee has the same powers and legal title over the broker and its property that a bankruptcy trustee would have, including the same right to undo "preference" payments (unfair last-minute payoffs to some creditors). On top of that, with SIPC's approval — but without needing court approval — the trustee can: (1) hire staff (including the broker's own officers and employees, and its "examining authority's" people) and outside help like accountants, whenever needed for any purpose of the liquidation; (2) use SIPC's own employees for any purpose of the liquidation; and (3) put up margin and keep customer accounts open, for the purposes described in section 78fff–2(f). (b) The trustee's duties As far as this chapter allows, or the court orders otherwise, the trustee has the same duties as a trustee in a regular chapter 7 bankruptcy case — including, if the broker also counts as a "commodity broker" under section 101 of title 11, the special duties in subchapter IV of chapter 7. But the trustee doesn't have to turn securities that count as customer property, or as part of the general estate, into cash — though the trustee may choose to. On top of that, the trustee must: (1) deliver securities to customers as much as practical, to satisfy their claims for securities of the same class and series of an issuer; and (2) with SIPC's prior approval (but no court approval needed), pay or guarantee the broker's debt to a bank, lender, or other party — but only if the trustee determines the securities that would come with paying or guaranteeing that debt are worth at least as much as the payment or guarantee itself. (c) Reports to the court The trustee must file the same written reports with the court and SIPC that a chapter 7 bankruptcy trustee would file, including updates on how much cash and securities have been returned to customers. The SEC decides, by rule, exactly what form and detail these reports need — fairly showing the results of the liquidation as of the report date or period, taking into account the reporting requirements of section 78q and its rules, and the scale of the broker's business. (d) Investigating the broker The trustee must: (1) investigate, as soon as practicable, the broker's conduct, property, debts, finances, and business operations, and anything else relevant to the liquidation, and report the findings to the court; (2) question the broker's directors, officers, and other witnesses — by deposition or other means — about those same matters; (3) tell the court about any fraud, misconduct, mismanagement, or irregularities found, along with any legal claims the estate could pursue; and (4) as soon as practicable, prepare and send SIPC (and anyone else the court names) a written statement of the investigation's findings, in whatever form and manner the court directs.