E TRADE Financial Corporation (NASDAQ:ETFC) announced today that Kenneth Griffin, the founder of Citadel LLC would step down from the board of the discount brokerage firm.
Kenneth Griffin rescued E TRADE Financial Corporation (NASDAQ:ETFC) twice when it was on the verge of bankruptcy.
Last week, Citadel dumped its entire 9.6 percent stake in the company in a secondary offering through Citigroup Inc. (NYSE:C) at $11.28 per share. Before the sell-off, Citadel had 27.4 million shares in E TRADE Financial Corporation (NASDAQ:ETFC). The brokerage firm said in a regulatory filing today that Griffin declined to seek re-election, and will quit the board when his term expires on May 9.
Of E TRADE Financial Corporation (NASDAQ:ETFC)’s 12-member board, Griffin is the third director who has announced he will be stepping down at the company’s May 9 annual general meeting. Earlier this month, chairman Frank Petrilli and board member Ronald Fisher announced their plans to step down at the annual meeting.
E TRADE Financial Corporation (NASDAQ:ETFC) has reportedly hired Fidelity Investments’ president Rodger Lawson to replace Frank Petrilli. But it is yet to announce the nominees to replace the outgoing board members. Ever since the New York-based company appointed ex-Barclays PLC (NYSE:BCS) (LON:BARC) COO Paul Idzik as its chief executive officer, a number of executives have parted ways with E TRADE Financial Corporation (NASDAQ:ETFC). The company’s marketing head Nicholas Utton quit last month. Paul Idzik is the seventh CEO of E TRADE Financial Corporation (NASDAQ:ETFC) since 2007.
Before dumping its stake last week, Citadel sold 50 percent of its shares in E TRADE Financial Corporation (NASDAQ:ETFC) to get below the 10 percent threshold so that it could become an activist investor and push E TRADE Financial Corporation to sell itself. Citadel invested $2.6 billion in E TRADE Financial Corporation when it was about to go bankrupt due to troubled mortgage loans and its shares had plunged below $1. The hedge fund rescued the company again in 2009 by offering a $1.7 billion debt exchange.
Citadel has earned over $800 million from its investments in E TRADE Financial Corporation (NASDAQ:ETFC), and the brokerage firm’s shares have fallen 10 percent since Citadel dumped its shares.
E TRADE Financial Corporation (NASDAQ:ETFC) shares were up 1.03 percent to $10.75 at 1:33 PM EDT.
