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Originally Posted by disneysteve
There was a trading scandal that rocked several big mutual fund companies a few years ago and it did have a big impact on the funds involved. I think that is unlikely at Vanguard or Fidelity but anything is possible. Honestly, I wouldn't make my investment decisions based on the fear that something like that might possibly happen sometime in the future.
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Note that this is a slightly different issue. Due to the fund scandal, investors pulled serious money out of the funds in question. If you're in that fund, you don't necessarily lose any money when that happens. BUT, the fund is forced to sell much of its assets before it's ready to. That can mean selling at a low point, for example, and it generates a lot of transaction costs.
This situation I don't believe is covered by SIPC because technically your assets are still there. It's just that your fund's performance will suffer.
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Originally Posted by WellManicuredMan
How much does SIPC cover you for? Sorry I could probably Google this and find the answer right away but thought I'd ask here first
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I don't have an authoritative source, but many web sites are saying it covers you for $100,000 in cash and $500,000 in securities you have on deposit.