E-Trade Financial Corporation (stylized as E*TRADE), a subsidiary of Morgan Stanley, offers an electronic trading platform to trade financial assets. The company receives revenue from interest income on margin balances, commissions for order execution, payment for order flow, and management services.
Palo Alto, California, U.S.
|Headquarters||Arlington, Virginia, U.S.|
|Rodger Lawson, Chairman|
Mike Pizzi, CEO
In 1982, William A. Porter and Bernard A. Newcomb founded TradePlus in Palo Alto, California, with $15,000 in capital. In 1991, Porter and Newcomb founded E-Trade Securities, Inc., with several hundred thousand dollars of startup capital from TradePlus. E-Trade offered its trading services via America Online and Compuserve. In 1994, its revenues neared $11 million, up from $850,000 in 1992.
By June 30, 1996, the company had 73,000 accounts and processed 8,000 daily trades, with quarterly revenue of $15 million.
In January 2004, Toronto-Dominion Bank held talks to merge its TD Waterhouse discount brokerage with E-Trade, but the two sides still needed to agree on control of the merged entity. TD Waterhouse instead merged with Ameritrade to form TD Ameritrade. After the merger, E-Trade continued talks to merge with TD Ameritrade, but the two sides could not agree on price and governance rights.
In August 2005, the company acquired Harrisdirect (known under previous owners as DLJdirect and CSFBdirect) from Bank of Montreal. Two months later, E-Trade acquired Brown & Company (aka BrownCo) from JPMorgan Chase for $1.6 billion in cash.
E-Trade suffered losses in the 2000s United States housing bubble. On November 29, 2007, E-Trade announced a transaction in which Citadel LLC invested $2.5 billion in cash in exchange for the company's securitized subprime mortgages, collateralized debt obligations (CDOs) and second lien loans, as well as 12.5% senior unsecured notes and 84,687,686 shares of common stock (equal to 19.99% of the then-currently outstanding shares). This resulted in a net $2.2 billion reduction in assets on the company's balance sheet. Citadel received a seat on the board of directors of the company and Mitch Caplan resigned as CEO.
In November 2007, the company revoked the brand name license from SBI E-Trade Securities in Japan.
In March 2008, E-Trade named Donald Layton, formerly JPMorgan Chase vice chairman, its new CEO. Layton had joined E-Trade's board of directors in November 2007, at the same time as the Citadel LLC deal.
On March 22, 2010, Steven Freiberg was named CEO. Freiberg was the former co-CEO of Citigroup's global consumer group and the former head of its credit card unit.
On September 12, 2016, E-Trade acquired OptionsHouse for $725 million, and later that month, Karl A. Roessner, E-Trade's general counsel since 2009, was appointed CEO.
On October 19, 2017, E*TRADE acquired RIA custodial services company Trust Company of America.
On August 14, 2019, Michael Pizzi was appointed CEO.
In October 2020, the company was acquired by Morgan Stanley. E-Trade offers services to people who can and want to invest but do not have sufficient assets to outsource their wealth management. E-Trade has over five million clients with total assets of US$360 billion. Morgan Stanley hopes this will attract new clients who will eventually be able to take Morgan Stanley's services any further; it will gain better access to electronic trading platforms.
See also Edit
- Ajaxo Inc. v. E*Trade Financial Corp.
- Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning, a 2016 Supreme Court case involving naked short-selling claims against E*TRADE, Merrill Lynch, and others, resolved in the defendant's favor.
- "Contact Us | E*TRADE". about.etrade.com. Retrieved 30 December 2022.
- "History of E*Trade Financial Corporation". Funding Universe.
- "E*Trade Financial Corporation Prospectus". E*Trade Financial. August 16, 1996.
- "E*Trade hits Wall Street". CNET. August 16, 1996.
- Buckman, Rebecca (January 12, 2000). "E*Trade Group Wins Approval To Acquire Telebanc Financial". The Wall Street Journal.
- Knight, Jerry (January 26, 2004). "For E-Trade, Courtship Ends Short of Marriage". The Washington Post.
- "ETrade to buy Telebanc Financial". Deseret News. Associated Press. Jun 1, 1999.
- "E-Trade acquires Web Street". American City Business Journals. May 21, 2001.
- "E-Trade to Buy Web Street for $45 Million". Los Angeles Times. Reuters. May 21, 2001.
- Valdmanis, Thor (January 14, 2004). "TD Waterhouse, E-Trade talk merger". USA Today.
- Austen, Ian (June 23, 2005). "TD Waterhouse USA Is Sold to Ameritrade". The New York Times.
- Goldstein, Steve (August 22, 2007). "E-Trade and TD Ameritrade have discussed merger". MarketWatch.
- "E-Trade to acquire BrownCo for $1.6B". American City Business Journals. September 30, 2005.
- Thurlow, Rebecca (May 16, 2007). "ANZ Bank clears final hurdle in bid to acquire ETrade Australia". MarketWatch.
- Robinson, Gwen (2007-11-12). "Subprime mortgage fears batter E-Trade". Financial Times. Retrieved 30 December 2022.
- "E*TRADE Financial Announces $2.5 Billion Investment Led by Citadel" (Press release). E-Trade Financial. November 29, 2007 – via U.S. Securities and Exchange Commission.
- Yerak, Becky (November 30, 2007). "Citadel boosts E-Trade stake with $2.5 billion investment". Chicago Tribune.
- "E*TRADE Financial and SBI E*TRADE Announce Termination of Branding Agreement in Japan" (Press release). E-Trade Financial. November 9, 2007 – via Business Wire.
- "E*TRADE Financial Appoints Chairman Donald H. Layton Chief Executive Officer" (Press release). E-Trade Financial. March 3, 2008 – via Business Wire.
- "E*Trade Chairman Layton adds CEO post". Reuters. March 2, 2008.
- "Scotiabank Completes Acquisition of E*TRADE Canada" (Press release). Scotiabank. September 22, 2008.
- "Scotiabank buys E*Trade Canada". CBC News. July 14, 2008.
- "E-Trade names director as chairman, interim CEO". San Diego Union Tribune. Associated Press. December 21, 2009.
- "E*TRADE Financial Appoints Steven Freiberg Chief Executive Officer" (Press release). E-Trade Financial. March 22, 2010 – via Business Wire.
- "E*TRADE Financial Appoints Paul T. Idzik Chief Executive Officer" (Press release). E-Trade Financial. January 17, 2013 – via Business Wire.
- "E*TRADE Financial Corporation Announces Leadership Transition with Close of OptionsHouse Transaction" (Press release). E-Trade Financial. September 12, 2016 – via Business Wire.
- "E*TRADE Financial Corporation Announces Third Quarter 2017 Results" (Press release). E-Trade Financial. October 19, 2017 – via Business Wire.
- "E*TRADE Announces the Appointment of COO Mike Pizzi to CEO". MarketWatch (Press release). August 14, 2019.
- "E*TRADE Bolsters Corporate Services Capabilities Through Purchase of Pioneering Student Loan Benefit Provider Gradifi" (Press release). E-Trade Financial. December 9, 2019 – via Business Wire.
- Orlofsky, Steve (December 9, 2019). "E*Trade buys student loan provider Gradifi for $30 million". Reuters.
- Manskar, Noah (October 2, 2020). "Morgan Stanley officially closes all-stock E*Trade takeover deal". New York Post.
- Hoffman, Liz (8 October 2020). "Morgan Stanley to Buy Eaton Vance for $7 Billion". The Wall Street Journal.
- "Morgan Stanley to Buy E-Trade". The New York Times. 20 February 2020. Retrieved March 26, 2020.