2.8.11. SIPA and SIPC
In the late 1960s, a crisis in the securities industry led to a frightening succession of brokerage failures. The customers they served lost their investments or became mired in bankruptcy proceedings. To restore public confidence in the industry, Congress responded with the Securities Investor Protection Act of 1970 (SIPA). SIPA created the Securities Investor Protection Corporation (SIPC) in an attempt to protect investors by providing insurance for the assets contained in their securities accounts.
The Securities Investor Protection Corporation is not a government agency but a member-owned, nonprofit corporation whose membership consists of v