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Citadel in Rescue Talks With E-Trade, Report Says

Date: Thursday, June 11, 2009
Author: The New York Times

E*Trade Financial is in talks with Citadel Investment Group, the hedge fund that is its largest shareholder, about a deal to shore up the struggling brokerage firm’s balance sheet, The Wall Street Journal reported, citing people familiar with the matter.

The two companies have been in negotiations for weeks to find a solution to E*Trade’s financial problems, The Journal said, adding that terms of the deal were unknown.

On Tuesday, E*Trade announced that Citadel Chief Executive Kenneth C. Griffin would be joining the firm’s finance and risk-oversight committee.

“With the appointment of Mr. Griffin, 40, Citadel Investment Group has exercised its right under the 2007 Citadel Investment Agreement to appoint a member to E*Trade’s Board of Directors,” E*Trade said in a statement.