In an interview, Michael Ference, a lawyer representing Yangtze River in the litigation, said the company will “continue to zealously prosecute its claims.” Nate Anderson of Hindenburg said “I stand by my research 100 percent.”
Interactive Brokers has ample cash to absorb the loss, according to Rich Repetto, an analyst at Sandler O’Neill who follows the company. The loss did prompt Repetto to cut his estimate for the company’s full year earnings per share by about 10 cents to $2.32.
Margin lending is an important business for online brokers, which have been struggling for years to replace revenue lost from lower trading fees. To take out a loan, investors have to put up collateral of many times the amount they’re borrowing. Interactive Brokers’ customers have margin loans outstanding of about $25 billion, a higher total than competitors.
This article was provided by Bloomberg News.