Tricom rethinks margin strategy
Troubled broker Tricom Securities is under instruction from its banks to reduce its margin loan portfolio to $500 million and has said that it could exit margin lending altogether. Managing director Lance Rosenberg has said that once the $500 million target has been achieved the outstanding loan book will be reviewed and if there is an opinion that it should be cut to zero then that is what they will do. Concerns have been raised about Tricom's practice of claiming ownership of shares funded by its loans which it would then lend to hedge funds that needed security for short selling. Mr Rosenberg said that he supports comments by the ASX chief executive, Robert Elstone, who said that there should be greater regulation of the margin lending industry.
Source: The Australian Financial Review