Posted By:
AnonymousFDIC insures bank accounts up to $100,000.
SIPC covers brokerage accounts up to $500,000.
Beyond that, you're on your own, except that SEC rule 15c-3 requires broker/dealers to segregate (keep separate) customer assets and other corporate assets.
In an insolvency, "customer claims" are a separate class of creditors and have a priority claim on "customer assets". Bear was somewhat different in that their broker/dealer operations are conducted in a separate corporate entity, a wholly-owned subsidiary of the parent. The parent is the dog, which got caught holding $30 billion of mortgage related CDO paper which will recover substantially less than par (some may be worthless even though it was rated AAA) versus a $10 billion tangible book value before the debacle (the same equity JP Morgan just bought for $300 million). If the Fed guarantees the recovery on the mortgage paper, Bernanke just handed Morgan $20-30 billion.
Cramer was responding to a question from a viewer. The key to understanding his answer is to make sure you understand the question he was responding to, but I can easily see how someone could infer from his answer that a holder of Bear stock shouldn't sell.