E-Trade ETFC (NASDAQ) the embattled online brokerage firm appears to have found a savior. Citadel Investment Group will head a consortium that will give the firm a $2.5 billion cash infusion. At the same time, the company's well known CEO, Mitch Caplan has stepped down. President R. Jarrett Lilien was named acting CEO, while the firm searches for a permanent successor. The company also named Donald H. Layton, former vice chairman at J.P. Morgan Chase, to the post of chairman. Layton succeeds George A. Hayter, who will remain on E-Trade's board.
Caplan joins the inauspicious ranks of other top CEOs (Stanley O'Neal, Charles Prince, ) who have been ensnared in the sub-prime crisis. E-Trade was very heavily invested in sub-prime mortgages and its ultimate survival was jeopardized by the problem.
We can expect more high level turnovers as a direct result of the crisis.
For more on the resignation and Citadel's cash infusion:
Fortune Daily Briefing
Wall Street Journal (more)
NY Times
Businessweek
Bloomberg
Financial Times
Wall Street Journal
Reuters
Deal Journal
SeekingAlpha
Crains
MarketWatch
BloggingStocks
SeekingAlpha 2
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I hope you follow up on this story. It will exemplify whether or not a new CEO can really be the agent of significant change in a badly damaged company that’s in dire need of a turnaround. The NewsVisual article on the E*Trade Financial Corp and Citadel Investment Group story http://www.newsvisual.com/newsvisual/2007/11/donald-layton.html#more suggests that Donald Layton will bring to the table the experience necessary to help reverse the company's downturn. I guess we’ll need to stay tuned.
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