You have $600,000 in stock and $50,000 in cash sitting in your stock accountwith the Shaky Standard Brokerage Firm. Should you be concerned aboutyour holdings if the brokerage firm files for bankruptcy, assuming the firmis covered by the SIPC? 
In terms of the inconvenience, you should be concerned. With respect to financial loss,the answer is that it depends. The SIPC protects brokerage customers against lossesthat would otherwise result from the failure of their brokerage firm. Customers are insuredup to $500,000, not more than $100,000 of which may be in cash. Any claims abovethose sums are applied against the firm’s available assets during liquidation. Mostbrokerage firms, however, have purchased additional insurance. Thus, if Shaky Standardhas additional insurance coverage, there is little risk of financial loss with respect to thesecurities. However, SIPC insurance covers the cash only if it is in the account incidentalto trading activities. If it is there to earn interest income, then there is no insuranceprotection for the cash.