I can imagine funds being lost due to hackers or fraudsters stealing assets from an account, or simply an unreasonable brokerage institution refusing access to a customer of their assets. Does SIPC have any role in these scenarios, or is it just strictly limited to when a financially troubled brokerage institution gets liquidated under the Securities Investor Protection Act?
just strictly limited to when a financially troubled brokerage institution gets liquidated under the Securities Investor Protection Act
The SIPA is the securities industry analog to the FDIC (which protects depositors of insolvent banks). The SIPC's authority to take action is triggered by information from certain sources suggesting that a securities industry firm is insolvent.
There are similar laws and agencies addressing insolvent savings and loan institutions, and insolvent defined benefit pension plans.
In general, there are not similar agencies addressing insolvency by insurance companies (which is why some business contracts require insurance companies used to fulfill covenants in the contract to have a certain minimum credit rating), or most kinds of mutual companies (i.e. consumer owned companies) which have a history pre-FDIC of having very low insolvency rates because they aren't incentivized to leverage themselves in the same way.
The SIPA was in many ways prescient. Securities firms didn't go bankrupt in large numbers until the 2007-2008 financial crisis when many brokerage and investment banking firms converted themselves from being owned by the managing partners of those firms to being owned by third-party investors. This led to incentives that reduced a focus on risk management and increased a focus on leverage (i.e. investing with borrowed money), and resulted in mass bankruptcies in the next significant recession.