Are ETrade Accounts Safe?
Etrade lost more than half of its market value in the past 24 hours after the brokerage issued a profit warning and a Citigroup analyst said the company may go bankrupt. Prashant Bhatia, a Citigroup analyst, estimates that Etrade has a 15 percent change of filing for bankruptcy. The reasoning being that the brokerage would need to take significant writedowns relating to mortgage-backed securities and bad loans. Are investors at risk? Etrade brokerage accounts are insured by the Securities Investor Protection Corporation, which can cover investors for up to $500,000 in cash and securities should a SIPC member broker go out of business. Additionally, the Federal Deposit Insurance Corporation insures deposits up to $100,000. The continuing negative news surround Etrade strengthens the need for investors continually manage their accounts and investments. Will investors transfer assets out of Etrade?
