...and totally mis-managed.

Marty flagged a really interesting Boston Globe piece earlier today. It's about the SIPC, the government-created but privately run company (I'm rolling my eyes, too) that ostensibly insures brokerage accounts. Per the Globe:

Until recently, the little-known Securities Investor Protection Corp. was flying high, confident its $1.7 billion fund was more than enough to insure investors against brokerage failures and fraud for years to come.

For a decade, the agency did not raise how much it charged brokerage companies for insurance: only $150 a year to insure every account for up to $500,000 whether it was Merrill Lynch, a small-time broker, or admitted Ponzi scheme operator Bernard Madoff.

Then came the financial collapse of 2008, which included Madoff's $65 billion swindle. The cost of the claims in the Madoff case is expected to be in the hundreds of millions of dollars - and could wipe out the fund's assets. SIPC officials, who for years have said the fund could withstand the most severe economic shocks, now acknowledge that it is in danger of dropping far below adequate levels.

Oy.

--Noam Scheiber