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With the turmoil
in the banking and investment industry in 2008 and 2009 customers
want to know how are they protected when they invest with Lyon
Capital Management. Lyon Capital Management does not take
custody of client assets. Customers of Lyon Capital Management
establish accounts with a large, reputable, national brokerage firm.
Then Lyon Capital Management is given discretionary authority by the
customer to make trades in these accounts.
These trades are
so-called "third party" or arms-length transactions. This
substantially reduces a client's risk. The customer receives
monthly statements from the national brokerage firm in addition to
statements from Lyon Capital Management.
No entity, not
Lyon Capital Management or a reputable brokerage firm can prevent
market loss – that is loss due to market related factors.
However, customers do have substantial protections against fraud.
Any brokerage firm recommended by Lyon Capital
Management for custody of client assets
is a member of the SIPC (Security
Investor’s Protection Corporation) and as such accounts are insured
by the SIPC for up to $500,000 per account for loss due to fraud
– that is, some type of occurrence where securities or title to
securities are stolen. Instances where the SIPC has not been able
to make investors completely whole (up to these stated limits) are
extraordinarily rare. Here are some statistics about claims
made with the SIPC since it’s formation in 1971 through the end of
2007:
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There have been 317 organization
failures handled by the SIPC.
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Of these failures only .8% were
SIPC member institution failures.
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The number of claims exceeding
SIPC limits was only 349.
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Only .05% of claims were not
fully satisfied
In addition to
SIPC coverage, additional brokerage insurance is provided through
Lloyd’s of London. This coverage provides protection of securities
and cash up to an aggregate of $600 million, and is limited to a
combined return to any customer of up to $150 million. This
protection becomes available in the event that SIPC limits are
exhausted.
Lyon Capital Management also monitors the
financial health of the brokerage firm we recommend. The firm
must:
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Custody a
substantial level of assets
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Exhibit
strong credit ratings from Moody’s S&P and Fitch
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Maintain
exceptional financial health as measured by standard financial
benchmarks
By focusing on investing your assets and
not on custody of your assets there is no conflict of interest.
Transactions are arm's length. And, the risk of fraud is
substantially mitigated.
24B Grove Street, Pittsford, NY 14534
Tel: (585) 248-9821
E-Fax: (413) 383-0768 |
