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Is Firstrade a Scam? Is Firstrade Safe and Legitimate Brokerage Firm?
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I'm often being asked the following questions: Is Firstrade a scam? Is it safe to use Firstrade? Is it SIPC (FDIC equivalent) insured? The short answer -
it's a legitimate company. Many people do, however, have issues with company's customer service and trading tools and we don't recommend this
firm to investors (you can read about it in Firstrade Review).
Firstrade is a member
of FINRA/SIPC. FINRA (Financial Industry Regulatory Authority - http://www.finra.org/) is the largest independent regulator for all
securities firms doing business in the United States. Its chief role
is to protect investors by maintaining the fairness of the U.S. capital markets. SIPC (The Securities Investor Protection Corporation
- http://www.sipc.org/) either acts as trustee or works with an independent court-appointed trustee in a missing asset case to recover
funds. The statute that created SIPC provides that customers of a failed brokerage firm receive all non-negotiable securities that
are already registered in their names or in the process of being registered. SIPC is an important part of the overall system of
investor protection in the United States. While a number of federal, self-regulatory and state securities agencies deal with cases
of investment fraud, SIPC's focus is both different and narrow: Restoring funds to investors with assets in the hands of bankrupt
and otherwise financially troubled brokerage firms.
Read full Firstrade Review.
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