As long as only a few people lose money SIPC and FDIC will be able to cover losses
In a significant meltdown both of these programs will be overwhelmed and are likely to hand out chits or vouchers instead of US dollars
These vouchers will be legally redeemable the same way that US dollars are (by fiat) but the vouchers are likely to trade at a discount to US dollars (they will be new and people won’t trust them)
I am seeing different answers as to whether SIPC would reimburse you before or after any bankruptcy proceedings – ‘your’ stock may be considered an asset of the failed business and NO bankruptcy judge is going to release business assets until the main creditors have been paid (if you have to ask whether you are a main creditor or not, YOU AREN’T)
