Etrade's reassurance letter to customers

This morning we announced that E*TRADE FINANCIAL has strengthened its capital position and eliminated exposure to the types of mortgage securities that have been generating business losses, as well as headlines, over the last several months. This has been accomplished through a strategic transaction with affiliates of Citadel Investment Group.

As part of this transaction, E*TRADE has received a $2.5 billion capital infusion. This transaction, led by affiliates of Citadel, not only strengthens our capital position but also represents a significant vote of confidence from one of the world's leading investment firms. Further, Citadel has removed the entire $3 billion asset-backed securities portfolio from the Company's balance sheet, solving our most significant balance sheet issue. Citadel understands we have been faced with a challenged balance sheet, not a challenged business.

While we have remained well capitalized by regulatory standards throughout the current credit storm, we have heard the concerns raised by our customers. Today, we have taken action to address these concerns. Our goal throughout this process has been to reinforce customer confidence and to set the foundation for our future. From this point forward our customers can be assured that E*TRADE FINANCIAL has no exposure to securities such as CDOs, Alt-A or second lien asset-backed securities....

Jarrett Lilien
Acting Chief Executive Officer, E*TRADE FINANCIAL