Are IB accounts protected from fraud and unauthorized access?

jimrockford · Apr 22, 2007

Quote from kiwi_trader:

Jim,

Here's the number 1 rational objection: I don't want to hand anyone a blank cheque to increase my costs. If someone can demonstrate to me that the insurance is reasonably priced then I'll look at it.

I agree. So how much would it cost? How much is too much?

jimrockford · Apr 22, 2007

Quote from giles117:

Can any of us control the people at a Bank? Can they wipe out your acunt?? it can all happen, and there are laws to protect us. Of course a Law is only as good as it's enforcement.

A rational approach to brokerage account security requires prevention. It is usually too late to get the money back after it has been stolen. The very best law enforcement does not alter this reality. If you are suggesting that we can rely on the fact that looting brokerage accounts is against the law, then I would say you don't understand the problem.

cscott · Apr 22, 2007

Wow, giles! Are you in la-la land or what! What are you talking about? This has nothing to do with securing your PC. This is about fraud protection and the possibility of unscrupulous employees screwing with your broker account. It doesn't matter how secure you PC is, broker employees can screw with your account on their end.

giles117 · Apr 22, 2007

Thank God I'm married. You are worse than a nagging ex girlfriend. Just because I disagree with your position doesnt make mine right. Did you skip Debate Class. Who freaking cares about my opinion. The thread isnt about my opinion. I am asking for some details, specifics, etc....

But you cant seem to find the imte to do that yet you find the time for all this nonsensical BS flowing out your fingertips and onto this thread.

Peace.

You never know who's opinion you can chnage by providing information. Defensive people are comical...

Peace, and hair grease....

loufah · Apr 23, 2007

Quote from dandxg:

E Trade has token security so how does that happen?

E*Trade's security key isn't mandatory, nor is it free unless you're a moderate size trader ($50K in assets on deposit or 120 trades/year).

loufah · Apr 23, 2007

Quote from cscott:

This has nothing to do with securing your PC. This is about fraud protection and the possibility of unscrupulous employees screwing with your broker account. It doesn't matter how secure you PC is, broker employees can screw with your account on their end.

I speak for no broker, but I suspect that if you lose money due to unauthorized trades made by your broker's employees, the presence or absence of a fraud protection guarantee won't make any difference.

You'll get your money back if the brokerage firm is reputable; if it's not, you won't (although you may have the consolation of talking to the DOJ and seeing your broker get put in jail.)

GTS · Apr 23, 2007

Quote from loufah:

I speak for no broker, but I suspect that if you lose money due to unauthorized trades made by your broker's employees, the presence or absence of a fraud protection guarantee won't make any difference.

I agree.

GTC · Apr 23, 2007

Quote from Loufah:
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Quote from dandxg:

E Trade has token security so how does that happen?
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E*Trade's security key isn't mandatory, nor is it free unless you're a moderate size trader ($50K in assets on deposit or 120 trades/year).

Loufah, the point is that even after having the security key, a brokerage firm considers the complete protection is necessary. The security key does not necessarily solve the fraud issues in the brokerage industry.

GTC · Apr 23, 2007

Quote from loufah:

I speak for no broker, but I suspect that if you lose money due to unauthorized trades made by your broker's employees, the presence or absence of a fraud protection guarantee won't make any difference.

I disagree. Do you happen to have known or heard any examples in which the brokerage firms that have fraud protection did not restore its deserving clients' accounts after the fraud occurrence?

jimrockford · Apr 23, 2007

Quote from loufah:

I speak for no broker, but I suspect that if you lose money due to unauthorized trades made by your broker's employees, the presence or absence of a fraud protection guarantee won't make any difference.

You'll get your money back if the brokerage firm is reputable; if it's not, you won't (although you may have the consolation of talking to the DOJ and seeing your broker get put in jail.)

This is just hopelessly naive.

Chances are that if money is stolen from your account, you'll never find out who did it. You'll likely never know if a broker employee was in on it. If you do manage to know, then you'll likely not be able to prove it. If your broker's employees loot your account, you will most likely not be able to prove it, and so, even a reputable broker will not be in a position to say you are automatically entitled to compensation because the theives included an employee of the broker.