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"Insurance" for investment fraud does not exist in the U.S. The Federal Trade Commission, Federal Bureau of Investigation, state securities regulators and other experts have estimated that investment fraud in the U.S. ranges from $10-$40 billion a year. In the case of microcap stock fraud, the toll on investors has been estimated as $1-3 billion annually.
With a reserve of slightly more than $1 billion, SIPC could not keep its doors open for long if its purpose was to compensate all victims in the event of loss due to investment fraud.
It is important to understand that SIPC is not the securities world equivalent of FDIC–the Federal Deposit Insurance Corporation. Congress specifically considered creating a Federal Broker-Dealer Insurance Corporation, but lawmakers wisely concluded that such a designation would be both misleading and out of step in the risk-based investment marketplace that is so different from the world of banking.
Originally posted by detachedindividual
Right, so a person is stupid and greedy enough to invest their millions in something so unsound and the public have to pay them back?
WTF America?
Why aren't you damn angry?
What the hell is going on in your country?
They protest in Greece over the shooting of a kid, and the entire American nation are being plunged into poverty while your government pays out trillions to already wealthy people, and you all just sit there like idiots thinking "oh well..."
I always fought the common misconception that all Americans are dumb, but you all seem to be supporting that theory really well.
Just wait, when you're all desperate for food, a job and a roof over your head, the rest of the planet will gladly remind you that you let all of this happen.
Originally posted by jefwane
From Crakuer's SIPC link
[...] a lot of supposedly sophisticated, in some cases formerly rich investors are now in the same boat as someone unsophisticated who signed an exploitative mortgage.
Originally posted by uplander
....or maybe just become an "investor" in Ponzi schemes. Then the government will put me on a permanent welfare....