FINRA Investor News
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Investor Alert
If a Brokerage Firm Closes Its Doors
Given the turbulence affecting the financial services industry these days—including recent announcements concerning Lehman Brothers—you may be wondering what would happen to your securities account if your brokerage firm closed its doors.
In virtually all cases, when a brokerage firm ceases to operate, customer assets are safe and typically are transferred in an orderly fashion to another registered brokerage firm. Multiple layers of protection safeguard investor assets. For example, registered brokerage firms must keep their customers’ securities and cash segregated from their own so that, even if a firm fails, its customers’ assets will be safe. Brokerage firms are also required to meet minimum net capital requirements to reduce the likelihood of insolvency, and to be members of the Securities Investor Protection Corp (SIPC), which insures customer securities accounts up to $500,000.
Our latest alert explains the role regulators—including FINRA—play when a firm goes out of business unexpectedly, and what you should know and do in the event that your brokerage firm ceases to operate.
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Investor Information
Information for Customers of Lehman Brothers
Concerning Lehman Brothers Holdings Inc., which filed for protection under Chapter 11 of the bankruptcy laws on September 15, 2008, the firm's U.S. regulated broker-dealer subsidiaries, Lehman Brothers, Inc. and Neuberger Berman, LLC, are still solvent and functioning. The broker-dealer subsidiaries have not filed for bankruptcy, and are expected to close only after the orderly transfer of customer accounts to another registered and SIPC-insured broker-dealer.
If you are a customer of Lehman and have questions about your account or the liquidation and transfer process, you should contact your financial adviser or visit the firm's Web site for updates and additional information.
After You Invest
One of FINRA’s main goals is to protect the investing public. We publish information to provide you with the tools you need to avoid problems in today's complex world of investing
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Join Us For The SEC’s Third Annual Senior Summit—Protecting Your Assets As You Age
Monday, September 22, 2008
You’ll learn how to get the most from your retirement income, prevent becoming a victim of fraud, ensure your financial plans are followed, and more. There are two ways to attend the Summit:
For more information, visit the SEC's Web site. |
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Questions? Search our FAQ database
FINRA’s Web site delivers relevant answers to plain English questions 24/7. Once on the FINRA FAQ home page, you can:
If you don't find an answer, use the "Ask an Expert" link within any FAQ and the system automatically routes new questions to the right subject matter expert, who will provide responses via email. |
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Past Issues of Investor News Available
In response to numerous requests, previous issues of Investor News are now available on our Web site. |
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View the online edition of Investor News.
Visit the FINRA Investor Education Web site at http://www.finra.org/Investors
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