Scotia Capital Expands Its Presence on Wall Street

Scotia Capital dramatically boosted its U.S. equity franchise by hiring a team of Wall Street veterans to expand its stock lending operation.

A team of five former Merrill Lynch executives joined the investment dealer arm of Bank of Nova Scotia (BNS) on Tuesday. The group will bulk up a business that is criticially important to clients such as hedge funds, which must borrow stock to take short postions. Strength in the somewhat obscure but vital sector expands Scotia Capital’s institutional client base.

The New York hiring follows on Scotia Capital’s expansion of stock lending desks in the U.K. and Asia. In an internal note to employees, the dealer explained:

Increased client demand for counterparty diversification throughout the recent credit crisis and Scotia Capital’s strong reputation on the street have brought significant growth potential for our participation in the US market.

The new unit all worked together at Merrill Lynch, then opened their own boutique which was bought by Wachovia (WB), which was in turn purchased by Wells Fargo (WFC).