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| E*TRADE Financial Corporation Summary: According to a press release dated October 2, 2007, the complaint charges E*TRADE and certain of its officers and directors with violations of the Exchange Act. E*TRADE, through its subsidiaries, offers financial solutions to retail and institutional customers worldwide. In addition, the Company offers mortgage, home equity, and margin and credit card products; real estate loans; and various consumer loans, including recreational vehicle, marine, commercial, automobile, and credit card loans. Specifically, according to the complaint, during the Class Period, defendants issued materially false and misleading statements that misrepresented and failed to disclose: (a) that the Company was experiencing a rise in delinquency rates in its mortgage and home equity portfolios; (b) that the Company failed to timely record an impairment on its mortgage and home equity portfolios; (c) that the Company’s securities portfolio, which includes assets backed by mortgages, was materially overvalued; and (d) that based on the foregoing, Defendants’ positive statements about the Company’s earnings and prospects were lacking in a reasonable basis at all times. The complaint further alleges that on September 17, 2007, the Company announced that it will exit the wholesale mortgage and it is revising its guidance for 2007, among other things. Upon this news, shares of the Company’s stock fell $2.32 per share, or over 15%, over the next six trading days as the investing public digested the news. On July 16, 2008 the judge appointed lead plaintiffs and approved their selection of lead counsel in the consolidated case. Plaintiffs have been given until the end of 2008 to file a Consolidated Complaint with other scheduling deadlines set to run through June 2009. On January 16, 2009, a Consolidated Amended Class Action Complaint For Violations Of The Federal Securities Laws against the defendants was filed with the court. INDUSTRY CLASSIFICATION: SIC Code: 6035 Sector: Financial Industry: Investment Services
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