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What happens to your money in a brokerage account if the broker goes bankrupt?

With all of the big financial leaders either going bankrupt or being bought out, what exactly happens to your money if your broker goes bankrupt, since the money is not FDIC insured? And also if you know your broker is headed that direction, do you sell all your assets and move your money out?

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4 Responses to “What happens to your money in a brokerage account if the broker goes bankrupt?”

  1. eddie said :

    they get to keep your money

  2. The Old Guy said :

    Your money is insured by SIPC (Securities Investors Protection Corporation) in an amount up to 500,000 per account, but most brokerage firms carry additional insurance that protects each account up to one million dollars.

    In reality, most brokerage that have filed bankruptcy have their accounts taken over by other brokerage firms and the account loose nothing nor have there been insurance claims.

  3. What?!? said :

    The short answer…. I would.

    Your accounts are supposed to be insured up to 500k by the Securities Investors Protection Corporation (SIPC). Securities brokers are not supposed to commingle your funds with their operating funds (unlike banks). They are comparable to the FDIC, but unlike the FDIC, the SIPC does not guarantee against loss in value, or against theft and fraud. They just guarantee your securities if the firm become insolvent.

    And like the FDIC, if your firm goes bust, it may take some time to recover the securities from that insurer.

  4. Don E said :

    You should check to see how much you have lost and make a decision based on how your stocks are doing and what you are invested in.


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