Here's a little fact for investors to think about, especially investors with online accounts. Stockbrokers are being alerted to build their legal defenses, so they can't be blamed if computer missteps cost you money.

If stockbrokers are assessing their exposure to risk, maybe you should, too.

The investors that the brokers worry most about are those who buy or trade high-flying tech stocks, Internet stocks and initial public offerings. (IPOs are companies selling their stock to the public for the first time.)

Frankly, the professionals aren't sure that online investors know what they're doing. When a purchase or sale goes badly wrong, due to a misunderstanding or trading snafu, arbitration claims fall on the brokerage firms like tears.

You can't blame the broker solely because you made a mistake or lost money on a trade. But you might file a claim if the broker's computer system didn't perform as advertised, or if the risks of using it weren't fully disclosed.

Mary Schapiro worries about online firms that make investing sound "easy and instantaneous," when it's not. Schapiro heads NASD Regulation (NASDR), the regulatory arm of the National Association of Securities Dealers.

She's actively urging online brokerage firms to make better disclosures. The Securities and Exchange Commission is looking into whether it should propose new investor-protection rules.

The risks are highest for the army of day traders, who hold fast-moving stocks for just a few hours or days, and then sell. Their version of "stock research" is to surf the message boards on the Web.

But investors with longer-term goals face serious dangers, too, if they also dabble in IPOs and Internet stocks. Those stocks can be scuttled by sudden market action that traders precipitate.

Say, for example, that you decide to buy some shares in an IPO coming to market at $15 a share. You call your broker or enter your order through an online account. You place your usual "market order" meaning that the stock will be purchased at the best available price.

But let's say that the IPO is sizzling hot. It opens the following morning at $80 and rises from there. Your order is filled at $90. Then the traders who bought for less pull out and the stock nose-dives, leaving you with an irretrievable loss.

The NASDR wants your broker to put more emphasis on "limit orders," which save you from paying more than you intended to. For a $15 IPO, for example, a limit order might specify "not over $20."

With a limit order, you might not be able to buy the stocks and sometimes, that's just as well. Some firms insist on limit orders for hot IPOs.

Here's another issue for people with online accounts. You might have arranged for "real time" stock quotes, meaning that your screen shows the prices currently offered in the market, with no time lag.

But in "fast market" conditions for a particular stock, transaction prices change so quickly up or down that quoted prices can't keep up. You might think you've sold a stock at $30, only to learn that the sale really went through at $10.

"You don't push a button in your house and make a trade," as some investors think, Schapiro says. Your trade has to be routed through a broker and into a market that may be different from the one that appears on your screen.

E*Trade touts "quotes so fresh you'd need a seat on the exchange to get them faster."

Memo to the SEC: Right at that spot, shouldn't E*Trade warn customers that the quotes they see aren't necessarily the price they'll get?

A spokesperson for E*Trade helped my associate, Dori Perrucci, find that warning, deep in the Web site. I'd wasted an hour trying to find it alone. How would a new online investor even know they should look?

And something else: Online trades can be virtually instantaneous, but sometimes high volume creates delays. If a trade doesn't get confirmed within a few minutes, investors might push the button again, Schapiro says. They don't realize that that creates a second trade.

During a frenzied market drop, when zillions of traders are desperately trying to sell, your online system might crash. Does the broker who promised you fast trades have enough phone lines to get your order through?

What if you can't get through, and you're trapped in a plunging stock you bought "on margin" that is, with money borrowed from your broker? You could lose more than the total value of your account. Brokers ought to disclose that, too.

Privatizing Social Security

The people who want to privatize Social Security often cite three Texas counties as proof that their plan can work.

These counties Galveston, Matagorda and Brazoria, on the Gulf coast withdrew from Social Security around 1981, when that was an option for state and local government employees. They set up a system of private investment accounts, plus survivor and disability benefits. The privatization brigade calls it a huge success.

But is it? That depends on whose account you're talking about. There are winners and losers in the Texas plans, according to recent findings by the General Accounting Office.

County employees with middle and lower incomes get less than Social Security would have paid often a lot less. That's with benefits figured on a comparable basis. High earners generally get more.

Even high earners may get less, however, if the spouse was a homemaker. Social Security provides extra benefits for homemakers, dependent children and many ex-spouses. These private plans don't.

The Texas plans can offer more to middle and lower earners with long careers say, 45 years of work. Social Security checks are figured on your highest 35 years of earnings, no more. But Social Security is better for individuals with shorter or spottier careers.

The GAO studied the Texas plans because they're touted as proof that private Social Security accounts could work. Congress needs to consider all the implications, including the fact that some of the most vulnerable people get less, says Barbara Bovbjerg, GAO's associate director for income security issues.

Gornto agrees that "we're not going to give that lower-income person as much as Social Security, using a fixed annuity."

Stock-based annuities could do better, but lower-income people might not choose them. Somewhere, there has to be a safety net.

Syndicated columnist Jane Bryant Quinn can be reached in care of the Washington Post Writers Group, 1150 15th St., Washington D.C. 20071-9200.

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