http://www.nasdr.com/sipc_protection.htm

"SIPC Liquidation Process
SIPC will generally ask a court to appoint a trustee to supervise the liquidation of a SIPC member that is insolvent or cannot return customer cash or securities. The trustee's duties include ensuring the return of customer property. The trustee will send claim forms to each customer of the liquidating broker/dealer based on the broker/dealer's records and publish notice of the liquidation in some newspapers. Customers receiving a claim form must return it to the trustee by the deadline on the form or risk not recovering their cash or securities. The trustee reviews the customers' forms and determines what moneys to pay and what securities to return.

Investor Checklist
Customers should protect themselves by taking the following steps:

Read And Keep All Documents
Read all documents when opening a customer account and keep copies of them.

Check Trade Confirmations
Get and keep a confirmation for each security transaction, and check it to make sure it is accurate.

Review Statements
Review account statements for accuracy by checking all purchases, sales, receipt and delivery of securities, securities positions, receipts and disbursements of cash, and any other debits and credits.

Pay The SIPC Member
Do not make checks or other payments payable to an individual if they are to be deposited in a securities account. Be extremely careful if asked to make a check payable to any entity that is not: (1) the broker/dealer itself, (2) the broker/dealer's clearing firm, or (3) a bank as escrow agent. Do not use abbreviations, such as initials, on checks or other methods of payment. Write out the full name of the payee.

Report Unauthorized Trades
Immediately report suspected unauthorized trades in writing to the broker/dealer and keep a copy of the letter or e-mail. If mailed, use certified mail to show the broker/dealer got the letter. Promptly send copies to a regulator listed below.

Report Problems To Regulators ASAP
Customers that cannot contact their broker-dealer, or who suspect wrongdoing or financial difficulties at the broker-dealer, should immediately contact a securities regulator. Failure to do so may endanger recovery."