It’s hard to see what would be covered in this ponzi scheme. Since the accounts probably never had any stock owned in them, to what are protected investors entitled? Maybe up to $500,000 of their original investment, but the compounded fraudulent returns? Seems hard to support that.
moreover, anyone who redeemed money out of the fund or closed a managed acct should not be spending that money yet as it will probably get clawed back as a fraudulent conveyance.
As for the 3:1 levered goofballs, they are toast. Thanks for playing. Maybe do a little due dilli next time. - Or: f you think you’re benefiting from someone’s cheating of someone else, think again.
I have no idea if they are covered or not.
My understanding is that $500,000 of their original investment is all that is protected minus withdrawals, of course.