Case | HBS Case Collection | April 2011 (Revised September 2011)

Securities Lending After the Financial Crisis

by Robert C. Pozen and Gayle Elizabeth Hameister

Abstract

In April 2009, Wendy Jefferson had just returned to her office following a whirlwind day of meetings with her newest client, Star Advisor. Jefferson, a financial services consultant, was eager to dig into the information provided to her and her team about the Star mutual funds and the income the funds earned from securities lending. Securities lending involved temporarily transferring securities from mutual funds managed by Star Advisor to short sellers and other investors. Income from these loans had been a small but secure component of Star mutual fund returns for decades.

Keywords: Business Earnings; Debt Securities; Financing and Loans; Investment Funds; Governing Rules, Regulations, and Reforms; Information;

Citation:

Pozen, Robert C., and Gayle Elizabeth Hameister. "Securities Lending After the Financial Crisis." Harvard Business School Case 311-130, April 2011. (Revised September 2011.)