NEW YORK, Nov. 6, 2007 LAWFUEL – The Legal Newswire — Kirby McInerney LLP announces that it has filed a class action lawsuit in the United States District Court for the Southern District of New York on behalf of all persons who purchased or otherwise acquired the publicly traded securities of E-Trade Financial Corporation (“E-Trade” or the
“Company”) (Nasdaq:ETFC) between December 14, 2006 and September 25, 2007, inclusive, (the “Class Period”).
The Complaint charges E-Trade and certain of the Company’s executive officers with violations of federal securities laws. 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. 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. 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.
If you are a member of the class, you may, no later than December 3, 2007, request that the Court appoint you as lead plaintiff of the class. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs can participate in important decisions which could affect the recovery for class members.
If you wish to discuss this action, or have any questions concerning this notice or your rights, please contact us, toll free, at (888) 529
4787 or by email at [email protected]
Kirby McInerney LLP has specialized in complex litigation, including securities class actions, for several decades. The firm has repeatedly demonstrated its expertise in this field, and has been recognized by various courts which have appointed the firm to major positions in consolidated and multi-district litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling hundreds of millions of dollars, and the firm’s achievements and quality of service have been chronicled in numerous published decisions. More information about the firm, class actions in general, or about the role of the lead plaintiffs in a securities class action can be obtained through Kirby McInerney LLP’s website at http://www.kmllp.com
More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca.