Sept. 15 (Bloomberg) -- The U.S. Securities and Exchange Commission said brokerage accounts at Lehman Brothers Holdings Inc. will be protected by federal safeguards after the firm filed for bankruptcy today.

Federal rules require segregation of Lehman's securities and cash, and accounts are insured by the Securities Investor Protection Corp., the Washington-based agency said in a statement today. SEC employees will remain at the brokerage firm in the coming weeks to continue that assignment and will oversee account transfers, the agency said.

``We are committed to using our regulatory and supervisory authorities to reduce the potential for dislocations from Lehman's unwinding, and to maintain the smooth functioning of the financial markets,'' said SEC Chairman Christopher Cox in the statement.

Lehman today filed a record Chapter 11 bankruptcy petition in Manhattan, listing more than $613 billion of debt. Its decision came after Barclays Plc and Bank of America Corp. abandoned talks to buy the firm and Wall Street prepared for a possible liquidation. The Federal Reserve, which worked with the Treasury over the weekend to prevent the investment bank from failing, is expanding the lending available to investment banks to ``strengthen and enhance'' financial markets.

The SIPC provides $500,000 of insurance per person. The program covers stocks, bonds, money-market funds, certificates of deposit and so-called custody accounts, such as a company's 401(k) plan. A maximum of $100,000 is paid out for cash.

SIPC Assessment

A SIPC-supervised liquidation of the brokerage hasn't been initiated, and as of this morning all brokerage customers' cash, stock and other securities are accounted for, SIPC said.

``It is important to understand that the holdings of broker- dealer Lehman Brothers Inc. would not be directly impacted by a bankruptcy filing at the separate entity Lehman Brothers Holdings,'' SIPC President Stephen Harbeck said.

The corporation will monitor the situation with SEC officials, and will ``intervene as necessary to protect the cash and securities of customers,'' Harbeck said in the statement.

The SIPC has spent $508 million and recovered $15.7 billion for 625,000 investors since being created by Congress in 1970, with 99 percent of investors getting their funds or securities back, according to an update for 2007 on the SIPC Web site.

Lehman's U.S. brokerage unit will likely be wound down outside of bankruptcy, allowing regulators to protect customers' securities, the SEC said.

The SEC said Lehman customers also will be protected by agency enforcement of net capital and customer asset protection rules, and by ensuring continued customer access to cash and securities.

Cox said the SEC worked with regulators including the U.K. Financial Services Authority, the BaFin in Germany and the FSA in Japan, along with the U.S. Treasury and the Federal Reserve.

To contact the reporters on this story: Jesse Westbrook in Washington at jwestbrook1@bloomberg.net.

Last Updated: September 15, 2008 11:15 EDT