randomep Posted July 4, 2014 Share Posted July 4, 2014 Hi all, Just thinking of the madoff case and saw an article in Forbes (or Fortune). In it, the author claims SIPC at times doesn't protect you because of clawbacks. That is, if a broker is fraudulent and suppose they took your money and never traded the securities that you wanted to trade, you are only entitled to the money you initially put in. So suppose you invested $1mil a long time ago and it became $2mil due to your own trading of securities. And many years ago you withdrew $1.5mil. Now suppose the broker has gone bankrupt and we found out they never traded anything for you. Then, even though you have $500k left and that is the maximum amount covered by sipc, they claim you got more money that you put in and so you won't get a dime from them. Is my understanding correct? that seems to the implication of clawbacks..... thanks in advance Link to comment Share on other sites More sharing options...
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!Register a new account
Already have an account? Sign in here.Sign In Now