UPDATE 1-E*Trade ex-CEO joins private equity firm Aquiline

(Adds New York to dateline, details on Caplan's background)

NEW YORK, Oct 21 (Reuters) - Former E*Trade Financial Corp (ETFC.O) Chief Executive Mitch Caplan has joined private equity firm Aquiline Capital Partners LLC as an executive adviser, the firm said on Tuesday.

Caplan, who stepped down from E*Trade in late 2007 after the discount brokerage suffered huge losses from its mortgage portfolio, will evaluate global opportunities in the retail financial services sector for Aquiline.

Hedge fund giant Citadel Investment Group led a group of investors that injected $2.6 billion into E*Trade last year, taking an 18 percent stake in the company and buying $3 billion of E*Trade's troubled asset-backed securities.

New York-based Aquiline invests in financial services companies in a number of areas including property and casualty insurance, asset management and life insurance.

Caplan was replaced by Jarrett Lilien on a temporary basis before current Chief Executive Donald Layton took the reins of E*Trade in March.

Caplan joined E*Trade in 2000 when it acquired Telebank, where he was chief executive. Telebank went on to become E*Trade Bank. (Reporting by Phil Wahba in New York and Shradhha Sharma in Bangalore; Editing by Maureen Bavdek)