The securities lending market is attracting closer scrutiny from its users, given the vast number of hedge funds now requiring to borrow stock to be used in shorting transactions. Earlier this year, institutional trading firm Electronic Trading Group filed a lawsuit against many of Wall Street’s securities lending businesses and individuals, accusing them of setting excessive fees and controlling the securities lending industry.
Law firm Entwistle and Cappucci, which is handling Electronic Trading’s action, did not return calls to confirm the status of the case, but some industry sources suggest that discussions with the defendants are under way.
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