Exercise
Answer TRUE or FALSE
- 1. TRUE or FALSE. If a broker-dealer is not covered by SIPC, it must disclose this fact only when asked by a customer.
- 2. TRUE or FALSE. A court can issue a protective decree when petitioned by SIPC due to an imminent danger to customer assets.
- 3. TRUE or FALSE. SIPC protects against all types of loss, but not all claims will be repaid.
- 4. TRUE or FALSE. Accounts owned by the same customer are always combined for SIPC coverage purposes.
Answers
- 1. FALSE. If a broker-dealer is not covered by SIPC, it must disclose this fact on the customer’s trade confirmation statement and tell customers this if asked.
- 2. TRUE. If there is an imminent danger of member failure, then SIPC may petition a federal court for a protective decree that will result in the appointment of a trustee.
- 3. FALSE. SIPC does not protect against all losses. For example, if the stock market crashes, SIPC will not cover the funds in a customer’s acc