Call Now For a Free Consultation:
(614) 532-4576
Nationwide Representation

How Investors Can Protect Themselves From Broker Fraud and Broker Bankruptcy

An easy way to protect yourself in the case of broker fraud and broker bankruptcy is to verify that your brokerage firm is a member of the Securities Investor Protection Corp. (SIPC) and that all the stocks and securities you purchase are registered with the SEC and the Ohio Division of Securities.

The SIPC is a nonprofit organization funded by member brokers-dealers. According to its website, the SIPC “helps individuals whose money, stocks and other securities are stolen by a broker or put at risk when a brokerage fails for other reasons.”

If a member brokerage firm goes bust, the SIPC will replace the investments of most stock investors by up to $500,000 in securities and cash (with a maximum of $100,000 in cash). Except for under certain circumstances, commodity futures contracts, fixed annuity contracts, and currency investments that are not registered with the SEC are ineligible for SIPC protection.

The SIPC does not protect you if you lose money due to the inherent fluctuations of the stock market, and it will not reimburse you in the event that you were sold worthless stocks or securities. Only stocks and other securities that are discovered to be missing from investor accounts are eligible for replacement by the SIPC. (If you have suffered losses not covered by the SIPC or losses that exceed the SIPC reimbursement levels, you should contact a securities litigation attorney to discuss your options for recovery.)

To check whether your brokerage firm is a member of the SIPC, call the SIPC Membership Department at (202) 371-8300 or search the SIPC Member Database.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

Share This Story
If you found the information provided by this article useful, consider sharing to your social media channels to help others in their search for reliable resources.
Consult with Our Legal Team
There is never a cost associated with a consultation
Atlanta Office

945 East Paces Ferry Road, Suite 2275
Atlanta, GA 30326
Columbus Office

614-224-6000
305 W. Nationwide Blvd
Columbus, OH 43215
Meyer Wilson
New Orleans Office

900 Camp Street 
Suite 337
New Orleans, LA 70130
Los Angeles Office

310-905-8688
2029 Century Park East,
Suite 400N
Los Angeles, CA 90067
Cleveland Office

216-600-1355
4781 Richmond Rd.
Suite 400
Warrensville Heights, OH 44128
Bloomfield Hills Office

248-817-8214
41000 Woodward Ave.,
Suite 350
Bloomfield Hills, MI 48304
Quick Links
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. Read More
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
Read More
chevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram