Close Your Brokerage Account!

Every day brings fresh reports of gross misconduct in the financial sector. So it makes sense to worry about how well your money is protected from fraudsters. Your bank account is guaranteed for up to $250,000 by a government agency–the Federal Deposit Insurance Corp. (FDIC). If you have an account at any of our nation’s 4,000 brokerage firms, however, your money is “protected” (for up to $500,000) by a Wall Street agency–the Securities Investor Protection Corp. (SIPC)–with no government guarantee. SIPC was established by an act of Congress in 1970, but Wall Street controls it, and asking Wall Street to protect investors from Wall Street is asking for trouble. Its website boasts: “SIPC protects customers if their brokerage firm fails.” Nothing could be further from the truth. Investors with accounts at firms that fail as a result of fraud can, incredibly, be forced to pay an SIPC-appointed trustee money, rather than the other way round. More on Forbes here.