Perhaps it does, E-Trade is owned by JPM, so JPM would take a hit before it goes here:
SIPC insurance covers the custodial function of a brokerage firm as well as as protection against unauthorized trading or account theft. It provides up to $500,000 in total coverage per customer for lost or missing assets of cash and/or securities. It covers up to $250k of cash. It does not protect one against loss of security value for their own bad decision making.
Looks like retail that has more than 500K are not going to be made whole.
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