While it is not likely, it is possible that payouts to “clients” of Bernie Madoff — the Wall Street swindler who operated what is probably the largest Ponzi scheme in history — could wipe out the reserves of SIPC (Securities Investor Protection Corp.).

Kathleen Pender wrote in the San Francisco Chroniclethat the head of SIPC has testified on Capitol Hill, and said that such a payout would not likely bankrupt the privately-operated investor insurance operation, but that it could happen.

But even if it doesn’t wipe it out, payouts could seriously erode the company’s reserves. In that case, according to the piece, an SIPC payout could force the company to come to Uncle Sam with open arms. Which, of course, would mean the government could offer a bailout to pay for a bailout.