When was the Last Time you did a Reality Check on Your Brokers?
by Tom Cleveland, Wealth Wire:
As investors, we always have to be prepared for the next risk that lurks around the corner. Events in the marketplace are often the driver that necessitates a response, but there are times when gradual changes occur far from view that suddenly morph into real problems. The European debt crisis has had many ramifications in a number of areas, but would you ever believe that your investment brokers could be under the gun due to a series of unwise decisions beyond their control?
The financial crisis that erupted on the tiny island of Cyprus has already caused a great deal of heartache and stress for currency traders the world over. The two largest banks in the market had invested well over a prudent level in Greek bonds and paid an even heavier price when those bonds were devalued. The accounts for both individual and commercial interests were seized, pending a resolution of potential bailout terms for the banks at fault. If your forex broker, or any other broker for that matter, commingled your account funds in operating accounts at one of these two banks, then you were affected.
