E*Trade Sued Over Interest on ‘Hard-to-Borrow’ Short Sales
- Plantiffs say they were charged ‘shockingly high’ rates
- Investors are paying increasing costs for short trades
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E*Trade Financial Corp. was sued by a pair of investors who claim they were charged “shockingly high” undisclosed interest rates on short sales of so-called hard-to-borrow securities.
The investors, who seek to represent others in a class-action suit, claim that E*Trade promised to disclose the rate but didn’t disclose that certain securities were being designated hard to borrow until last month, and didn’t disclose what the estimated interest rate would be before trades were placed.