The Huge SIPC Risk Your Broker Isn’t Disclosing

Your broker has a duty to disclose all risks from investing with him and his company. He also has an obligation to tell the truth. If he misleads you, including failing to disclose a major risk to your investment, you can sue him personally. There is one huge investment risk that your broker is surely not disclosing. It’s the risk arising from SIPC, the so-called Securities Investor Protection Corporation. And there is one extremely serious misrepresentation he surely is making, namely that your brokerage account is insured by SIPC. Falsely claiming that you are insured represents financial fraud. Let’s start with three basic facts. More on Forbes here.