- Der nächste Bank Run (in USA): ETrade (mTuL) (o.Text) - DT, 12.11.2007, 21:13
- Hier der Text: (mT) - DT, 12.11.2007, 21:17
- Wie sind die Kunden in solch einem Fall geschützt? - Albrecht, 12.11.2007, 23:00
- wer handelt heute noch echte Aktien? Die CFD's gehen wohl eher in den Kamin... (o.Text) - CaptainB, 12.11.2007, 23:11
- Schutz 100 TUSD cash durch FDIC und 500 TUSD mittels SIPC für Securities (mT) - DT, 12.11.2007, 23:16
- Wie sind die Kunden in solch einem Fall geschützt? - Albrecht, 12.11.2007, 23:00
- Hier der Text: (mT) - DT, 12.11.2007, 21:17
Schutz 100 TUSD cash durch FDIC und 500 TUSD mittels SIPC für Securities (mT)
-->Investor assets in E-Trade accounts said to be safe
By Greg Morcroft
Nov 12, 2007 15:54:00 (ET)
NEW YORK (MarketWatch) -- As investors shaved more than half the value from E-Trade Financial Corp. shares Monday, financial advisers, regulators and the company said that account holders have several layers of protection, and in general do not have to fear that the current problems will cause customers losses.
"Brokers are highly regulated and SIPC insurance is in place, meaning that their assets are safe," said John Deyeso, a certified financial planner at Financial Filosophy.
He added that the insurance does not protect against losses due to market drops, but it does protect against brokers going out of business or not being able to supply the investments on demand.
Shares of E-Trade (ETFC, Trade ) lost more than half their value Monday, plunging as the company faces more subprime-related write-downs and as analysts at Citigroup suggest a possible bankruptcy for the online broker.
The SIPC is the Securities Investor Protection Corporation. It is the first line of defense in the event a brokerage fails owing customers cash and securities missing from customer accounts.
E-Trade is a member of the SIPC, and as such, its protections cover securities customers up to $500,000, including $100,000 for claims for cash, E-Trade said Monday.
"SIPC does not cover individuals who are sold worthless stocks and other securities," according to the company's Web site. Rather,"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." Read more about SIPC.
The Federal Deposit Insurance Corporation insures deposits at E-Trade Bank to at least $100,000, the company added.
E-Trade also said that its E-Trade Clearing LLC unit has insurance from London insurers that provides additional protection, with an aggregate limit of $600 million, to pay amounts in addition to those returned in a SIPC liquidation under certain circumstances. This coverage does not protect against loss of the market value of securities, E-Trade disclosed.
On Sunday, Citigroup downgraded the online broker's shares to sell and raised the specter of bankruptcy, and now retail investors may be wondering what they should do with their E-Trade accounts.
"Bankruptcy risk cannot be ruled out," Citi analysts wrote in a note Sunday. They also lowered E-Trade's rating to sell.
Citi's Prashant Bhatia, in a move criticized by E-Trade as irresponsible, cautioned that there is a higher probability that customers will start a run on the firm's bank, given the worries that it may be beyond repair.
Clients have other options, such as moving assets to competing brokerages, Bhatia said.
The analyst added that active traders, who are a segment that is in tune with daily market events, generate a large proportion of E-Trade's activity and earnings
"The continued negative news flow could be a catalyst to transfer assets out of E-Trade," according to Bhatia.
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