2.3.2.1 Customer Protection Rule
Between 1968 and 1970, more than a dozen broker-dealers went bankrupt, resulting in customer losses in excess of $100 million. The SEC responded with Rule 15c3-3, known as the customer protection rule. Prior to that time, broker-dealers had been in the habit of pledging customer securities as collateral for bank loans, and customer credit balances had been used to finance the b