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Aside from the different coverage these two organizations provide, the big difference between the FDIC and the SPIC is that the FDIC is an independent agency of the federal government backed by the full faith and credit of the United States government and the spic--although created by a Congressional act--is neither a government agency nor a regulatory authority. It's a nonprofit, membership corporation, funded by its member securities broker-dealers. --from article by Lela Davidson September 15, 2008
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Was madoff covered by sipc?
Current news reports indicate that no trades were ever made by Madoff's advisory company using any investors' funds. Therefore, the brokerage industry was not involved in this theft. SIPC is only available to the brokerage industry which pays premiums for such coverage. Accordingly, no brokerages were involved,no premiums were paid, and no SIPC coverage is available. This is merely A confidence scheme and has no insurance coverage than one would have on A common theft unless the victim had indepently purchased coverage.
Is your Lehman Brothers 401K Safe?
Sorry but I am new at this. I have a friend with a 401K with the failed company Lehman Brothers. She fears she may have lost all of her 401K money. Does SIPC cover the bankrupcy?
How safe is online investing compared to using a broker?
Yes, online investing is just as safe as using a broker. Online brokerage firms are required to meet minimum equity requirements and to be a member of SIPC.
Are mutual funds covered by sipc?
No."If you buy mutual funds through a brokerage account, those funds are protected against theft by SIPC. However, if you buy mutual funds directly from a mutual fund company, they are not protected by SIPC, "because no protection is necessary," Harbeck says. Each mutual fund is set up as a separate entity, apart from the company that manages the fund. "The employees at a mutual fund don't have direct access to the assets," says Mike McNamee, a spokesman for the Investment Company Institute, which represents fund companies. "All mutual fund assets by law must be held in a trust account at a custodian bank. That is a special account, not part of the bank's assets. The bank can fail, but the trust accounts are not involved in any way shape or form in that failure," he adds." ..........from:= Brokerage accounts protected by SIPC = Kathleen Pender Thursday, July 17, 2008 For more information, go to www.sipc.com for brokerage accounts or www.fdic.govfor bank and thrift accounts. Net Worth runs Tuesdays, Thursdays and Sundays. E-mail Kathleen Pender at kpender@sfchronicle.com.http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/07/17/BUJN11QA2H.DTL This article appeared on page C - 1 of the San Francisco Chronicle
Is first command financial services a legitimate company?
First Command Financial Services is an investment adviser and a broker-dealer registered with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority and all 50 states and the District of Columbia. It is a member of the Securities Investor Protection Corporation (SIPC). The company is an FPA Alliance firm, one of only two companies ever to receive this elite recognition from the 27,000-member Financial Planning Association. It is the parent company of First Command Bank, a federally chartered savings and loan association regulated by the OTS and a member of the FDIC. First Command has developed a national reputation for thought leadership the First Command Financial Behaviors Index®, a research initiative that provides timely consumer data to journalists and is regularly referenced in the national news media. The U.S. Department of Defense and the National Committee for Employer Support of the Guard and Reserve has honored First Command with its Patriotic Employer Award, which is presented to companies and individuals for contributing to national security and protecting liberty and freedom by supporting employee participation in America's National Guard and Reserve force.
Is your cash safe in Scottrade account?
Scottrade is a member of the Securities Investor Protection Corporation (SIPC), which protects securities held by investors up to $500,000, including a maximum of $100,000 in cash claims*. A brochure with the details of SIPC protection is available at www.sipc.org There is a good chance your cash at Scottrade will be involved in the bank sweep program allowing you to pick up FDIC insurance rather than FDIC eliminating issues related to the disclaimer below. If you are unsure call your local Scottrade branch.*In order for cash to be covered by SIPC or excess SIPC, cash held in an account must be for the purpose of, or as a result of, securities transactions. Cash held in a securities account for the purpose of earning interest, which was not the result of a securities transaction, may not be covered by SIPC or excess SIPC.
Was madoff covered by sipc?
Current news reports indicate that no trades were ever made by Madoff's advisory company using any investors' funds. Therefore, the brokerage industry was not involved in this theft. SIPC is only available to the brokerage industry which pays premiums for such coverage. Accordingly, no brokerages were involved,no premiums were paid, and no SIPC coverage is available. This is merely A confidence scheme and has no insurance coverage than one would have on A common theft unless the victim had indepently purchased coverage.
Are futures markets covered by sipc?
no
Who insures your stocks in the stock market?
No One, not your broker, not the SIPC, not the FDIC. The only insurance you have is if your broker goes out of business, the stocks and cash you have in your account is insured. If you would like to buy "insurance" on a stock, the way to do it is with PUT options. Options Weekly has a newletter that teaches people how to do this.
How does SIPC protect investors?
The Securities Investor Protection Corporation, or SIPC works either as a trust or court-appointed trustee to help recover funds in a missing asset case.
Is SIPC a type of insurance and under what circumstances would SIPC apply?
SIPC stands for Securities Investor Protection Corporation. It is an important part of the overall system of investor protection in the United States. While a number of federal, self-regulatory and state securities agencies deal with cases of investment fraud, SIPC's focus is both different and narrow: Restoring funds to investors with assets in the hands of bankrupt and otherwise financially troubled brokerage firms. The Securities Investor Protection Corporation was not chartered by Congress to combat fraud.
What is the financial health of Scottrade?
Scottrade is a very healthy company financially. They have always been very conservative and have weathered the most recent financial crisis very well. Scottrade was never involved in the toxic debt instruments such as mortgage backed securities and invest their assets in short term US Treasuries. They are fully covered by the SIPC and even have additional insurance coverage from a private firm to increase limits above and beyond that which is included with SIPC. See Related Links (below) for more detailed information related to Scottrades financial health.
Is your Lehman Brothers 401K Safe?
Sorry but I am new at this. I have a friend with a 401K with the failed company Lehman Brothers. She fears she may have lost all of her 401K money. Does SIPC cover the bankrupcy?
Are money market mutual funds covered under sipc?
see link: http://www.thestreet.com/s/what-happens-when-a-brokerage-fails/funds/saving-money/10393483.html?puc=aoljjc
How safe is online investing compared to using a broker?
Yes, online investing is just as safe as using a broker. Online brokerage firms are required to meet minimum equity requirements and to be a member of SIPC.
Are IRA accounts at Bernard Madoff insured by SIPC and from fraud?
The Securities and Investor Protection Corporation (SIPC) provides insurance coverage after a lengthy claims process IF it chooses to start a SIPC proceeding. It is not automatic. Customers of a failed brokerage firm get back all securities (such as stocks and bonds) that already are registered in their name or are in the process of being registered. After this first step, the firm's remaining customer assets are then divided on a pro rata basis with funds shared in proportion to the size of claims. If sufficient funds are not available in the firm's customer accounts to satisfy claims within these limits, the reserve funds of SIPC are used to supplement the distribution, up to a ceiling of $500,000 per customer, including a maximum of $100,000 for cash claims. Additional funds may be available to satisfy the remainder of customer claims after the cost of liquidating the brokerage firm is taken into account. see www.sonnerez.com for general information about the Madoff case. The SEC in its complaint, also filed in Manhattan federal court, accused Madoff of a "multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm." The agency said it's seeking emergency relief for investors, including an asset freeze and the appointment of a receiver for the firm. Ira Sorkin, another defense lawyer for Madoff, couldn't be immediately reached for comment. http://www.stockmarketfunding.com/SMF-Blogs/Hot-Trends/December-2008/Madoff-Charged-in-$50-Billion-Fraud-at-Advisory-Fi.aspx
What is Securities Investor Protection Corporation?
Securities Investor Protection Corporation is a nonprofit organization created by US government to protect brokerage accounts against losses due to failure of brokerage houses. The maximum coverage is $500,000 per customer, with a limit of $100,000 on cash equivalents (e.g. money or money market funds). All brokers and dealers registered with the SEC are required to be members of SIPC. Losses due to regular market risks, like price fluctuations, are not covered
