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anazuzo
Dud?


Joined: 04 Mar 2008
Posts: 2
Location: North America

Stock Brokerages
PostPosted: Tue Mar 04, 2008 7:00 pm Reply with quoteBack to top

Questions:

Are stock brokerages separate entitites from their affiliated banks (such as WellsTrade)? Are they at risk from losses in the bank's other divisions?

Assuming you have ultrasafe holdings (such as a 100% Treasury Mutual Fund), can you assume your holdings are safe in the event of a bank failure?

If you own securities through a brokerage, what happens to your securities in the event of a failure?

Can the brokerage sell your securities to cover their other losses?

I read a story somewhere about people back in the 30's thinking they had made sound investments, only to discover that the brokerage had liquidated their good assets to cover other margins. Is this scenario possible today?

Thanks in advance to anyone who can answer or partially answer these questions for me.

Anazuzo
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Hackney71
C-4


Joined: 08 Nov 2007
Posts: 1260
Location: Nashville

Re: Stock Brokerages
PostPosted: Tue Mar 04, 2008 7:25 pm Reply with quoteBack to top

Quote:
Saturday, January 19, 2008
What happens if my stock broker goes belly up?

"The SIPC is a quasi-governmental entity (non-taxpayer supproted) overseen by the Securities and Exchange Commision (SEC). Generally, SIPC insures SEC-registered securities to a maximum of $500,000, including $100,000, per account.

Excluded from coverage are: unregistered investments (i.e. limited partnerships), commodities, currencies and options. And remembe, SIPC doesn't protect against mistakes.

If a broker/dealer goes bankrupt, customers who hold their securities in street name in a "cash account" should be able to retrieve their securities.

The rub comes when a customer's securities are held in a "margin" account." -Stock Article Link

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