Chingo De Dinero

Has anyone seen the latest news on E*Trade? Well apparently Citi sent out a report talking about the write down of some of the loans they have made, and how it would force them int bankruptcy. On no!!!! This is the last thing I want, most of my money tied up with a broker that is bankrupt. They could sell my stocks and use that money to help support their business. Of course, I do not think they would do such a thing, but it does not take too much of an imagination to think of this. So I know banks are FDIC insured up to $100,000, but this does not cover my stocks, who does this?

The answer is SIPC, the is a non-profit organization that insures brokerage accounts from the broker taking your money when they go bankrupt. It was created in 1970 by congress, and per their website have refunded 505 mUSD to investors since then. I could not find the amount they insure, but from what I remember it is $500,000 (if anyone knows for sure, please leave it in a commit). For a little more on them, it is member run, no government interaction. It is important to know that this group does not combat fraud, only bankruptcy.

So there is my answer, if E*Trade were to go bankrupt, I could file a claim with the SIPC and get my stocks back in 1 to 3 months.