The cash can be distributed to various participating banks if someone need sit.
But the investments (which are almost always the much larger bulk of the money as well) is ocnsidered part of that total SIPC insured coverage. You can't shift around investments like that. You also can't insure it adequately as a brokerage. You might have an impressive sounding insurance policy with Lloyds of London, but when you compare it to the massive trillions in some of these brokerages and the fact that the insurance coverage is split amongst all investors....it isn't really mush coverage at all.
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