Could Wall Street Really Seize Our Retirement Savings in the Next Financial Crash?

I found this opinion piece that’s making some pretty alarming claims about retirement account safety:

https://www.foxnews.com/opinion/wall-street-could-seize-your-retirement-savings-next-financial-crash-its-perfectly-legal

Essentially, the claim is that our 401k and IRA might not be as protected as we think. There’s this practice called “rehypothecation” where brokerage firms can use your assets as collateral for their own trading activities. Basically, the assets we think are sitting safely in our account are actually being leveraged by Wall Street for their own gain and protection.

SIPC insurance only covers up to $500k per account and wouldn’t help in a systemic crisis where multiple firms fail at once. Plus, Wall Street lobbying has blocked any real regulatory reform that would explicitly protect retirement assets from being used as collateral.

If our brokerage firm goes under during a crash, we could lose access to our retirement savings. Even though these accounts are supposedly held separately, the legal framework allows firms to use them for their own purposes.

Is this just fear mongering or something we need to be concerned about? It sounds like we may need to push for reform with our elected representatives.