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SIPC is the Security Investors Protection Corp., of which almost all
stock brokers are members. The SIPC provides protection in case the
stock broker fails. After reading the recent post on the INTRUST saga
I was wondering why futures brokers don't have their "SIPC"?
Looking at the SIPC's web site: http://www.sipc.org the SIPC seems
to be quite busy processing investor claims from failed stock brokers.
In fact the SIPC claims 99% of eligible investor claims are paid out.
You can even look up the members of the SIPC to make sure your stock
broker is a member of the SIPC. However the SIPC excludes futures,
currency, and other transaction not under the SEC.
However I gather from these INTRUST posts that the futures broker
failed, and that the account holders at that futures broker lost some
of their account capital due to the failure of the futures broker.
Account holder seem to have been battling in court for years to try to
get their capital back.
So that raises the question whether futures brokers carry the same
type of insurance as stock brokers do - in case the futures broker
fails? For example is there an "SIPC" for futures brokers? If not
how much of the capital for an account at a futures broker might be
lost if a futures brokers fail?
> -----Original Message-----
> From: charles meyer [mailto:chmeyer@xxxxxxxx]
> Sent: Wednesday, February 13, 2002 10:05 PM
> To: realtraders@xxxxxxxxxxxxxxx
> Subject: Re: [RT] GEN: INTRUST EMBEZZLEMENT - Insurance?
>
>
> Hi-
>
> Having insurance and being able to collect on the policy
> are two different
> issues. There are usually limitations and exclusions. The
> first thing the
> insurance company will do is go to their legal department
> and try to find a
> way
> out of paying the claim. It may go to court and then take years to
> collect;
> assuming a favorable outcome. From a practical standpoint;
> I simply don't
> trust this type of coverage for fraud. But what you have
> outlined below may
> be different from the type of fraud that can occur
> elsewhere; and from the
> various counter parties involved.
>
> Chas
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