ETFC down 50% in a day. Some say they don’t have any assets and might not even really exist, just a spe run amuck from enron.
i was wondering the same thing, esp since the citi analyst saying they may go bankrupt. I know they say we have FDIC and SIPC insurance, but i don’t know if i really want to stick around and test how efficeient the FDIC process is
SIPC should keep you covered. It will insure $500,000 in assets $100,000 of which can be cash. With that said, I don’t know how much red tape is involved. Even a yahoofinance article was predicting a bankruptcy in the near future.
What about money market funds? Would these be considered securities or cash by the SIPC and would they be covered just like stocks and bonds?
KJH, I was worried about the red tape issue too, and how much would actually be involved in getting my money back. I was thinking about xfering all my savings there out, but I don’t really want to sell off all my securities now, esp with where they are now
I heard the SEC steps in and engineers a takeover so nobody has to even deal with sipc and/or redtape.
Diesel- You could ACAT the securities out to another discount broker. Assets will transfer inkind so no selling will be necesary except for propietary mutual funds or money markets at E-Trade. I know Scottrade will give you $ for rolling an account to them. If you want, I can refer you so you get some free trades too. An ACAT transfer these days takes a week or so since most of it is electronic. I think a money market fund (deposit account at E-Trade that you trade from) is cash. However I’m not very familiar with classifications.
Where’s Frank when you need him? I guess the phone’s probably ringing off the hook.
pdxanalytics : put the $5,000 in ETFC I feel like gambling and tossing a little money at it for fun, school is boring and its too cold to go on a cruise ship.
I’m thinking about buying some ETFC, too.
you damm right the phones are ringing off the hook. suckas have to wait like 20 mins on the phone these days to get through due to a lack of staff and increase client base. funny thing is, i just had a 1.5 hour convo with a client specifically on this issue. of course, i have no intimate knowledge of Etrade. If they go bankrupt i guess the client’s money is frozen for the time being. transfer out process takes more then 1 week, at least here (i have seen transfers take up to 6 weeks). the quickest way is always cash and if you got mutual funds, add another week on top of that. move your money elsewhere to somewhere safe like Ameritrade or Td waterhouse if you’re in Canada. money market is considered a “cash equivalent”. however, it is subject to losses if the underlying assets in the MM goes awry. we had tons of people calling in asking us to give htem the break down of the assets in our MM. lots said, “i rather hold it in cash then in MM”. if you’re looking to move the money out, sell the MM and just move the cash. it’ should take no more then 4 days. etrade can simply sell their accounts or get bailed out in another way. they’re just an intermediary and if their risk maangement systems are proper, their revenues or profits should in no way affect their clients account since they’re suppose to be holders of securities. in the case of “shorted stocks”, their system should have it that no matter what happens, the only person that is affected is the person who shorted the stocks. move your money over here. i can get some credit for it too. it’ll look good since i’m looking to bounce right about now anyways.
Insurance: FDIC covers insurance in state and federally chartered bank savings and money market accounts. True that FDIC generally engineers a buyout rather than working through guarantee process. Still, you could potentially have your cash tied up for a while (weeks? months? unknown). SIPC is for SEC registered investment companies and doesn’t insure against loss of principle due to investment activity, only fraud. If an e-trade exec runs off with your cash, your covered. If the E-trade money market invested in SIVs or CDOs to juice the yield and those investments crater, you could be faced with a principle loss. Never heard of the SEC engineering a buyout to protect investors (although LTCM may be an arguable exception).
Correct me if I am wrong…you cant ACAT when you are on margin…and the vast majority of ETFC’s customers are on margin.
I’m pretty sure you CAN ACAT when have some margin debt.
Crap . . . I should have gambled on it. Did you virginCFAhooker?
Why can’t you? It’d still be a 60% winner if it goes back to $8, and it’s been between 12-14 for the last 2 months.
If I did that, I would need to follow the story a little more closely. I was mainly talking about the one day bump this stock got today. Had I done it, I would have taken the gain and “play with house money”
Niblita…I fell asleep. I just moved to tokyo and have had a hard time with the nearly opposite time change thing.
Is bankruptcy inevitable for ETFC-Q? Have any of you picked up any shares betting on a recovery?
dieselbp67 Wrote: ------------------------------------------------------- > i was wondering the same thing, esp since the citi > analyst saying they may go bankrupt. I know they > say we have FDIC and SIPC insurance, but i don’t > know if i really want to stick around and test how > efficeient the FDIC process is It’s not very efficient or it wasn’t some odd years ago. My sister had a CD at a bank that went under and it took her months to get her money with no interest.