Regulator delays decision on E*Trade, Citadel deal

August 15, 2009

e-trade   WASHINGTON, Aug 14 (Reuters) – U.S. regulators on Friday suspended their consideration of an application from E*Trade Financial <ETFC.O> that would have resulted in routing more of the online broker’s trades through Citadel Investment Group’s market-making operation.
   The Office of Thrift Supervision “suspended consideration of the application while we examine certain issues,” spokesman William Ruberry said, declining to say what the issues were.
   Citadel and E*Trade struck a tentative deal in June that would require the online broker to begin routing 97.5 percent of its customers’ Nasdaq stock and stock option trades to the hedge fund’s market-making operation.
   The deal requires OTS approval, and Friday was the deadline for the regulator’s decision.
   Citadel, which has twice injected capital into struggling E*Trade, said on Thursday it would slash its investment by more than two-thirds over the next few months.
    Ruberry said there is no specific timeframe for any final decision on the application.
   “It depends on how long it will take to resolve whatever issues,” he said.
   E*Trade sends about 40 percent of its customer trades to Citadel’s market-making operation under a nearly 2-year-old agreement. That agreement coincided with the hedge fund’s initial $2.5 billion investment in E*Trade.
   Chicago-based Citadel said on Thursday it plans to sell 120 million of its 166 million E*Trade shares, which will leave Citadel with a roughly 4.1 percent stake.
   Citadel founder and Chief Executive Kenneth Griffin, who joined the E*Trade’s board on June 8, intends to remain a director. Citadel said it will maintain significant holdings in the broker’s debt and will likely end up as E*Trade’s largest stockholder after the sales.
   Citadel reported a 14.9 percent stake in E*Trade as of Monday.
   (Reporting by Karey Wutkowski in Washington and Joseph A. Giannone in New York; Editing by Richard Chang) ((E-mail:karey.wutkowski@thomsonreuters.com +1 202 898 8374)) Keywords: ETRADE/CITADEL 
  
Friday, 14 August 2009 23:10:44RTRS [nN14320051] {C}ENDS

712 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

Howdy! I simply wish to give you a huge thumbs up for the excellent information you’ve got here on this post. I will be returning to your blog for more soon.

After I initially left a comment I appear to have clicked on the -Notify me when new comments are added- checkbox and now each time a comment is added I receive 4 emails with the exact same comment. There has to be a means you can remove me from that service? Thank you!

I’m gone to say to my little brother, that he should also visit this blog on regular basis to take updated from most up-to-date news update.|

I know this if off topic but I’m looking into starting my own blog and was curious what all is needed to get setup? I’m assuming having a blog like yours would cost a pretty penny? I’m not very web savvy so I’m not 100% positive. Any tips or advice would be greatly appreciated. Cheers|

This is a topic that’s close to my heart… Many thanks! Where are your contact details though?

It’s nearly impossible to find experienced people for this subject, however, you seem like you know what you’re talking about! Thanks|

I am regular reader, how are you everybody? This paragraph posted at this web site is genuinely good.|

Way cool! Some very valid points! I appreciate you penning this write-up and the rest of the website is extremely good.

Howdy! This article couldn’t be written much better! Looking through this post reminds me of my previous roommate! He constantly kept preaching about this. I will forward this information to him. Pretty sure he’ll have a great read. Thanks for sharing!

Aw, this was an extremely nice post. Finding the time and actual effort to create a very good article… but what can I say… I hesitate a whole lot and never seem to get anything done.

It’s difficult to find experienced people for this topic, however, you seem like you know what you’re talking about! Thanks|

whoah this weblog is fantastic i really like reading your articles. Keep up the good work! You already know, lots of individuals are hunting round for this info, you can aid them greatly.