{"id":4426,"date":"2007-05-21T22:04:26","date_gmt":"2007-05-21T22:04:26","guid":{"rendered":"https:\/\/www.stockbrokerfraudblog.com\/2007\/05\/insurance_of_brokerage_account_1"},"modified":"2007-05-21T22:04:26","modified_gmt":"2007-05-21T22:04:26","slug":"insurance-of-brokerage-account-1","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/insurance-of-brokerage-account-1\/","title":{"rendered":"SIPC Insurance of Brokerage Accounts to be Disclosed to Investors But Not Explained"},"content":{"rendered":"

\t\t\t\tFor decades investors have been told their accounts were protected by the Securities Investor Protection Corporation (SIPC) without being told what was covered by this insurance. Few realize this protection only provided that whatever securities and cash are in an account when a firm goes out of business would be returned to the investor. (Furthermore, such claims are difficult to file and often take years to process.) <\/p>\n

Thus, if investors are defrauded into purchasing investments, if their accounts are churned for commissions or if other wrongdoing occurs in their accounts, they are NOT protected by this Federal insurance. Even claims for unauthorized transactions, including the sale of viable securities in order to purchase worthless securities from the firm or its officers are not always refunded. In short: Fraud is not covered by SIPC! <\/p>\n

After years of complaints, efforts by attorneys representing investors and pressure by some consumer-friendly legislators, the National Association of Securities Dealers, Inc. (NASD) and the Securities Exchange Commission (SEC) were finally persuaded to act. However, rather than force brokerage firms to disclose the insurance coverage (or lack of it) the NASD and SEC passed a much less effective requirement. <\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

For decades investors have been told their accounts were protected by the Securities Investor Protection Corporation (SIPC) without being told what was covered by this insurance. Few realize this protection only provided that whatever securities and cash are in an account when a firm goes out of business would be returned to the investor. (Furthermore, […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3774,3788,3760],"tags":[],"class_list":["post-4426","post","type-post","status-publish","format-standard","hentry","category-broker-dealers","category-nasd-enforcement","category-sec-enforcement"],"yoast_head":"\nSIPC Insurance of Brokerage Accounts to be Disclosed to Investors But Not Explained — Investor Lawyers Blog — May 21, 2007<\/title>\n<meta name=\"description\" content=\"For decades investors have been told their accounts were protected by the Securities Investor Protection Corporation (SIPC) without being told what was — May 21, 2007\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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