Joe Levi:
a cross-discipline, multi-dimensional problem solver who thinks outside the box – but within reality™

11/12/07 An Important Message for E*TRADE Customers

This morning on the way in to work I was listening to the radio as I normally do, and heard a troubling bit of news: financial analysts have changed their position on E*TRADE to "sell" on rumors of financial instability due to the the whole sub-prime mortgage debacle. This morning when I logged into my E*Trade account I was met with this message:

To all E*TRADE FINANCIAL customers:

November 12, 2007

This is a challenging time for the financial services industry. Bad news in the credit, housing, and stock markets continues to dominate and E*TRADE is not immune to these market conditions.

However, you, our customers, should know that we continue to be well capitalized by regulatory standards. As a matter of fact, we could absorb an immediate write down in excess of $1 billion and still remain well capitalized. Nobody knows for certain what the ultimate impact will be from these markets, but it is our expectation that news in the market will get worse before it gets better and, armed with these expectations, we are taking prudent measures to effectively manage the company’s balance sheet.

We will continue to earn your confidence, providing state-of-the-art asset protection, including E*TRADE’s Complete Protection Guarantee, SIPC Protection for E*TRADE Securities customers and FDIC Insurance for E*TRADE Bank customers.

We appreciate the opportunity to continue to serve you and your investing needs.
Jarrett Lilien
—Jarrett Lilien
President, COO and Director, E*TRADE FINANCIAL

  • For Further Details
  • Investor Relations page
  • Press Releases
  • Customer Service 1-800-ETRADE-1
  • Of course, it’s in E*Trade’s best interest to calm it’s users and investors… but still, it’s a tad worrisome.


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    3 Responses

    1. Matt says:

      Citigroup said they think losses could reach $5 billion, which would put E*Trade in bankruptcy unless they could access capital. You should definitely read up on the situation.

    2. Joe says:

      Matt, Hopefully the losses are less than that. Could you provide a citation for your “$5 billion” amount?

      According to the letter E*Trade “could absorb an immediate write down in excess of $1 billion and still remain well capitalized”.

      Here’s to hoping!

    3. Joe says:

      On a related note, is CitiGroup the next ENRON? This article point to that conclusion… worth a read:

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