SIPC protection $500k per account

I do not know how to answer a hypothetical question like that with a BD that a member of SEC/FINRA/SIPC with very strict reporting standards.

ironchef said:
You didn't answer my question: If a US registered brokerage commits fraud and misused client's money. How are clients' positions transferred since they are non-existent?
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ironchef said:
You didn't answer my question: If a US registered brokerage commits fraud and misused client's money. How are clients' positions transferred since they are non-existent?
More...

If you're really worried use multiple brokers.

It helps protect you from other things like IT failures shutting down a broker.
 
Robert Morse said:
I do not know how to answer a hypothetical question like that with a BD that a member of SEC/FINRA/SIPC with very strict reporting standards.
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Hypothetical yes, but in the case of FDIC, history showed that FDIC always made the depositors whole even for those that exceeded the limit. So, I have no problem doing business with a small local bank even when my deposit exceeds the limit.

If we can be somewhat reassured that SIPC can act in a similar fashion, I would be more inclined to consider smaller brokerages because they often offer better service.
 
engineering said:
If you're really worried use multiple brokers.

It helps protect you from other things like IT failures shutting down a broker.
More...
But still it seems only max $500k per person is protected, not per account. Isn't it?
 
ironchef said:
You didn't answer my question: If a US registered brokerage commits fraud and misused client's money. How are clients' positions transferred since they are non-existent?
More...

My info may be old (years ago I was a Principal)... but the way the regs read back then regarding this... "SIPC insurance covered stocks/cash MISSING" from an account... for ANY reason... up to the limits of SIPC coverage.
 
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Scataphagos said:
My info may be old (years ago I was a Principal)... but the way the regs read back then regarding this... "SIPC insurance covered stocks/cash MISSING" from an account... for ANY reason... up to the limits of SIPC coverage.
More...


Principal of what bucket shop?
 
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