Monday, September 15, 2008

The SIPC is not the FDIC, but ...

Emily, who makes me look like a raving optimist, has been lately contemplating mattresses, hordes of critical surgical supplies buried in waterproof caskets at remote locations, and Swiss bank accounts.

So it's good to learn today that there exits something called the SIPC (also that the small investor part of Lehman Bros is still in business):
SIPC - The SIPC Mission

... When a brokerage firm is closed due to bankruptcy or other financial difficulties and customer assets are missing, SIPC steps in as quickly as possible and, within certain limits, works to return customers' cash, stock and other securities. Without SIPC, investors at financially troubled brokerage firms might lose their securities or money forever or wait for years while their assets are tied up in court.

Although not every investor is protected by SIPC, no fewer than 99 percent of persons who are eligible get their investments back from SIPC. From its creation by Congress in 1970 through December 2007, SIPC advanced $508 million in order to make possible the recovery of $15.7 billion in assets for an estimated 625,000 investors...
It's not exactly the FDIC, but, on the other hand, the coverage limits are significantly higher. They don't cover investment fraud.

No comments: