March 22 E*Trade Financial Corp said
Friday that Citadel LLC founder Kenneth Griffin, its one-time
rescuer, would not seek reelection to the bank and discount
brokerage company's board.
The Citadel hedge fund, which had been E*Trade's largest
investor, unexpectedly announced last week that it was selling
its 9.6 percent stake in the company through a secondary
offering, sparking a selloff in the stock.
Griffin, who had pushed for a sale of New York-based
E*Trade, is the third member of its 12-person board to announce
he will step down at its May 9 annual meeting. Chairman Frank
Petrilli and director Ronald Fisher said earlier this month that
they would not serve.
Petrilli is being replaced by former Fidelity Investments
President Rodger Lawson, who had been lead director last year.
The departures coincide with the exits of several E*Trade
executives, including marketing chief Nicholas Utton, who have
left since Paul Idzik took over as chief executive officer in
February. Idzik is the company's seventh CEO since 2007.
Griffin led Citadel's investment of $2.6 billion in E*Trade
in 2007, when it was flirting with bankruptcy as a result of
troubled mortgage loans and its shares were trading below $1.
Sources said his investment, which included senior notes paying
12.5 percent, yielded well over $800 million for Citadel.
Citadel sold its final stake of 27.3 million shares through
Citigroup at $11.28 each. Shares of E*Trade, which did not
receive any proceeds from the offering, were up 0.8 percent at
$10.72 in early trading.
E*Trade has not announced new nominees to replace the
departing board members.