Question I have my stocks in an IRA account at Wamu Investments Inc.
My stocks are a combination of Mutual funds and Securities-equity. My IRA is not insured by the FDIC.
If WAMU goes bankrupt is my IRA Safe?
My thoughts that WAMU is only the middle man for each stock company. Thus if WAMU goes under, I would still own my stocks as long as the individual Stock Equity does not go belly up. Please explain. I can not afford to loose my IRA. What would happen to my IRA/stock holdings if WAMU goes bankrupt?
Thank you
Answer Hi Karin-
Bankruptcy of an IRA custodian should not result in losses for IRA owners, but you should read a bit about the protection provided and make sure it's adequate relative to the size of your account.
While there is no FDIC protection for securities, there is SIPC protection for brokerage accounts - you can learn more about it here:
SIPC protection would come into play if you had a brokerage account at WaMu Investments Inc. that held stocks and mutual funds, and WaMuII became insolvent.
The mutual funds are a bit different, if you are talking about WaMu mutual funds rather than other mutual funds held through a WaMu brokerage account. A mutual fund ("investment company" in securities law) is organized independently of its manager, so the assets of the fund are not assets of the manager. If the manager goes bankrupt, the assets of the mutual funds of that manager cannot be tapped by creditors.
