Securities Investor Protection Act

The Securities Investor Protection Act of 1970 is the U.S. federal law that established the Securities Investor Protection Corporation. It was enacted by the 91st [United States Congress] and signed into law by Richard Nixon on December 30, 1970. Most brokers and dealers registered under the Securities [Exchange Act of 1934] are required to be members of the SIPC.
The SIPC maintains a fund that is intended to protect investors against the misappropriation of their funds and of most types of securities in the event of the failure of their broker.