Ib Screwed?

T

tradingbug

IB has been a great place to trade from in the recent past. I have a couple accounts. One which is not substantial but do have another account which is significant in this brokerage.

It seems that Lloyds of london is an insurance policy for IB if shit hits the fan. Unfortunately, Lloyds of london looks like they are in the shitter themselves..... http://www.bloomberg.com/apps/news?pid=20601087&sid=a_eI0BCcraNo


If shit hits the fan, Lloyds of London may not be able to cover the losses. I am all ears. Does anyone with substantial money have a safe broker that they have done significant research that they are sure will be safe in the coming storm?
 
Lloyds is an exchange (think NYSE) with syndicates that make up its membership (think member firms). Thirty years ago every partner (in their lingo -- "a name") in a syndicate was personally liable for any claims. The expression was "right down to the last cuff link" and, given the severity of UK bankruptcy statutes, that was damn close to true.

in the '80's there were some scandals and some busted syndicates. I suspect the nature of the market has changed along with the personal guarantees.

If you are relying on insurance for comfort you need to know and understand your potential counter party in case of a claim. If it is an important consideration for you (and it well may be) do your homework.
 
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