Securities Investor Protection Corporation is a non profit organization, established by Congress in order to protect the clients of brokerage houses in the event of bankruptcy. Securities Investor Protection Corporation, which is founded by all brokerage houses and dealers registered by the SEC, insures assets up to $100.000 on cash and $500.000 on securities.
When a brokerage defaults and client's assets are missing, main goal of Securities Investor Protection Corporation is to return customers cash or securities. The first thing when brokerage fails owing customer's assets, usually, is to ask a federal court to appoint a trustee to liquidate the firm and protect its clients.
From 1970, SIPC managed to recover more that $15 billion for 626.000 investors.
