Whether the Bankruptcy Code's avoidance provisions operate differently in the context of a SIPA liquidation proceeding

QUESTION PRESENTED The Securities Investor Protection Act of 1970 (SIPA) instructs that the trustee of a securities brokerage undergoing liquidation proceedings may seek to avoid a transfer made by the brokerage only “to the extent that such transfer is voidable or void under the provisions of’ the Bankruptcy Code. 15 U.S.C. § 78fff-2(c)(3). The Bankruptcy Code, in turn, permits a trustee to avoid any transfer made by the debtor “with actual intent to hinder, delay, or defraud.” 11 U.S.C. § 548(a)(1)(A). But consistent with centuries of law, it allows transferees who received a transfer “for value and in good faith” to retain such transfer. Id. § 548(c). In this SIPA liquidation, arising from the Ponzi scheme perpetrated by Bernard L. Madoff Investment Securities (Madoff), the trustee sought to claw back millions of dollars that Madoff paid to petitioners in excess of their brokerage account deposits. Petitioners undisputedly received these transfers in good faith. And the transfers were “for value” under the Bankruptcy Code because they discharged Madoff’s contractual obligations to petitioners. Yet the Second Circuit held that petitioners could not invoke the Bankruptcy Code’s protection of “for value” transfers because that provision “operates differently in a SIPA liquidation.” App. 29a (emphasis added). The question presented is: Whether the Bankruptcy Code’s avoidance provisions operate differently in the context of a SIPA liquidation proceeding, notwithstanding that a transfer is voidable in SIPA only “to the extent that such transfer is voidable or void under the provisions of’ the Bankruptcy Code. 15 U.S.C. § 78fff-2(c)(8).