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Non-Tech : Interactive Brokers / Timberhill
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To: Gary Korn who wrote (1577)5/24/2001 11:33:50 PM
From: FishbackJ  Read Replies (3) of 9012
 
Hi Gary,

I tried calling around today to find out about getting additional personal coverage against failed brokerages/clearing houses not covered by the SIPC. The reaction ? It was like I was speaking a foreign language.

If I read the NYT article right, the SIPC doesn't want to honor the insurance claims of broker customers who's money is actually held separately in clearing houses. And yet, that's nearly all of the brokers that traders use.

I already have an IB account and a Cyber account, but I am currently of the opinion that Cyber is certainly no faster (and possibly slower) than my IB trading platform and it's MUCH more expensive. (plus I really like the no-frills/just functionality interface of IB TWS software)

I used to have an MB account too, but I don't think broker size really indemnifies traders against fraud or loss. If you remember the Datek scandal of a couple (?) of years ago, the principals were apparently borrowing money from various accounts and paying them back later ?.....well, that tells me that you can't trust even the largest brokers. (As you probably know, Datek owns the Island ECN or visa versa)

I guess your article just hit on a nerve that's kept me feeling a little queasy for quite a while.....particularly when the market isn't doing too well. A lot of brokerages don't exist anymore and I have to wonder if everyone got their money back when the music finally stopped.

If you happen to find an independant insurer for account coverage, please let me know.

Thanks again.
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