The Bernard Madoff case has been in the headlines for alleged securities fraud. Regardless of how that case is resolved, there have been other promoters accused of robbing investors.
If you or someone you know has been defrauded by a brokerage firm or someone affiliated with a brokerage firm, restitution from the Securities Investor Protection Corporation (SIPC) is likely. Victimized investors can file a claim at www.sipc.org.
The SIPC protects brokerage accounts up to $500,000 per customer, including $100,000 in cash. This protection will reimburse you for securities that were lost or stolen but not for losses you suffered because prices went down. If you were robbed of 100 shares of Microsoft, for example, the SIPC might provide you with 100 shares of Microsoft.
Up to now, the SIPC has been successful in providing restitution, up to the limits mentioned above. However, the SIPC is not a government agency; it’s a private group, funded by brokerage firms. If claims from investors run into the billions of dollars and cash-strapped brokerage firms can’t meet them all, the federal government may have to bear some of the cost.
