The passage, or failure, of a single piece of legislation will tell us a lot about whether our Congress represents the people of the United States or just its financial service industry donors. The legislation is the Restoring Main Street Investor Confidence and Protection Act, HR 3482 and Senate bill S 1725. The website govtrack.us gives the bill only a 23 percent chance of passage. The Restoring Main Street Investor Confidence and Protection Act would define the value of a person’s brokerage account — or “net equity” — as the value of the account based on the last statement from the brokerage house. In other words, the value of your account is what the brokerage house reports to you. That amount, up to $500,000, is what you could recover from the Securities Investor Protection Corporation, the SIPC, in the event of failure or fraud at the brokerage firm that has your money. More in the Waco Tribune [...]

Stephen P. Harbeck, president and CEO of the Securities Investor Protection Corporation (SIPC), has written a strongly worded response to my Forbes column entitled “Close Your Brokerage Account.” A longer version of that column, entitled “Why No One Should Use Brokerage Accounts,” was published on the Making Sen$e page. Mr. Harbeck claims that my columns in Forbes and on the Making Sen$e pages are “misleading in the extreme.” I omitted no facts that were relevant to the point that investing funds in brokerage accounts runs the extreme risk of a) paying taxes each year on the reported appreciation and b) withdrawing those funds, spending them on a legitimate purpose (charity, supporting older parents, tuition, etc.), and then being sued by a SIPC-appointed trustee because it turns out that your broker, or the broker at the next desk, was a crook. If you are sued, you will potentially have to pay back every penny you withdrew in the last two years (six years if the trustee gets his way in federal court). More on PBS [...]

H.R.3482 – New Cosponsor – Representative Steve Scalise [R-LA1] has signed on to co-sponsor H.R.3482 – Restoring Main Street Investor Protection and Confidence Act

S.1725 – New Cosponsor – Senator Robert “Bob” Casey [D-PA] has signed on to co-sponsor the sister Senate bill S. [...]

Congressman Jim Gerlach [R-PA6] signs on to H.R. 3482 – Restoring Main Street Investor Protection and Confidence Act, bringing the total to 42 co-sponsors.
IF YOUR REPRESENTATIVE IS CURRENTLY NOT A CO-SPONSOR (CLICK HERE FOR LIST OF CURRENT CO-SPONSORS), please make every effort to call your representative and urge them to support H.R. 3482. If you need guidance on making the call, or information on who to contact, please call us at (800) 323-9250 or email [...]