LOS ANGELES, Nov. 21, 2007 (PRIME NEWSWIRE) -- Notice is hereby given that Glancy Binkow & Goldberg LLP has filed a Class Action lawsuit in the United States District Court for the Southern District of New York on behalf of a class (the "Class") consisting of all persons or entities who purchased or otherwise acquired the securities of E-Trade Financial Corporation ("E-Trade" or the "Company")(Nasdaq:ETFC) between December 14, 2006 and November 9, 2007, inclusive (the "Class Period"). This Class Period is broader in scope than the periods covered in prior E-Trade investor lawsuits. As a result, the expanded Class Period includes investments that were not covered by the prior lawsuits.
A copy of the Complaint is available from the court or from Glancy Binkow & Goldberg LLP. Please contact us by phone to discuss this action or to obtain a copy of the Complaint at (310) 201-9150 or Toll Free at (888) 773-9224, by email at info@glancylaw.com, or visit our website at www.glancylaw.com.
The Complaint charges E-Trade and certain of the Company's executive officers with violations of federal securities laws. Among other things, plaintiff claims that defendants' material omissions and dissemination of materially false and misleading statements concerning the Company's business, prospects and financial condition caused E-Trade's stock price to become artificially inflated, inflicting damages on investors. E-Trade, through its subsidiaries, offers financial services to retail and institutional customers worldwide, including retail investments and trading, checking, money market and savings accounts, mortgage and home equity products, real estate loans, and various consumer loans. The Complaint alleges that throughout the Class Period defendants failed to disclose that: (1) the Company was experiencing increased delinquencies in its mortgage and home equity portfolios; (2) the Company had failed to adequately reserve for loan losses and would be forced to take $95 million in charge-offs and provision expenses of $245 million in the second half of 2007; (3) the Company had failed to timely record impairments on certain securities and, consequently, such portfolios were materially overvalued; and (4) as a result of the foregoing, the Company's statements about its 2007 financial and operational results were lacking in any reasonable basis when made.
On September 17, 2007, E-Trade shocked investors when it announced that the Company was exiting the wholesale mortgage business, restructuring its institutional brokerage business, and revising its previously issued 2007 financial guidance, and that it expected, among other things, "severance, restructuring and other exit charges" of $32 million as a result of its decision to exit and restructure the businesses. Additionally, the Company stated that it was revising its earnings guidance for 2007, to an earnings-per-share (EPS) range of $1.05 to $1.15 for the year, significantly lower than the Company's previously issued EPS guidance in the range of $1.53 to $1.67. As a result of this news, over the next six trading days E-Trade shares fell $2.32 per share, or more than 16.3 percent, to close on September 25, 2007, at $11.89 per share on heavy trading volume.
Even after these revelations, the Company's stock price was still artificially inflated. On November 9, 2007, E-Trade revealed that it would take a write-down on a portfolio of securities and mortgage backed CDOs. E-Trade also reported that the Securities and Exchange Commission had opened an inquiry of the firm's loans and securities portfolios. Following this disclosure, a Citigroup analyst raised concerns about the Company's future viability. On November 12, 2007 (the first trading day after the write-down was announced), the Company's stock fell $5.04 per share, or 59 percent, to close at $3.55 per share on heavy trading volume.
Plaintiff seeks to recover damages on behalf of Class members and is represented by Glancy Binkow & Goldberg LLP, a law firm with significant experience in prosecuting class actions, and substantial expertise in actions involving corporate fraud.
If you are a member of the Class described above, you may move the Court, not later than December 3, 2007, to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this Notice or your rights or interests with respect to these matters, please contact Michael Goldberg, Esquire, of Glancy Binkow & Goldberg LLP, 1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067, by telephone at (310) 201-9150 or Toll Free at (888) 773-9224 or by e-mail to info@glancylaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca