E*TRADE FINANCIAL Corporation Announces Resignation of Mitchell H. Caplan from Board of Directors

NEW YORK--(BUSINESS WIRE)--E*TRADE FINANCIAL Corporation (NASDAQ: ETFC) today announced the resignation of Mitchell H. Caplan from the Company’s Board of Directors, effective December 31, 2007. Also to be disclosed in an 8K filing today are the terms of Mr. Caplan’s severance agreement related to his former position as CEO. The agreement is specifically limited to the terms of his pre-existing employment contract dated September 1, 2004. Pursuant to the terms of that contract, Mr. Caplan will receive a payment of $10.9 million, which is two times the sum of his base salary and bonus during 2006, as well as two years of medical, life and disability insurance coverage. In addition, he will be entitled to reimbursement of certain legal fees. Mr. Caplan’s resignation from the Board effectively severs all ties with the Company.

“E*TRADE’s Board and management team are acting swiftly to establish and execute a turnaround plan designed to unlock the Company’s value”

“E*TRADE’s Board and management team are acting swiftly to establish and execute a turnaround plan designed to unlock the Company’s value,” said Donald H. Layton, Chairman, E*TRADE FINANCIAL Corporation. “E*TRADE’s Board of Directors remains confident in the strength of the core franchise and the loyalty of its customer base.”

On November 29, the Company announced that Mr. Caplan had stepped down as Chief Executive Officer. E*TRADE FINANCIAL President and Chief Operating Officer R. Jarrett Lilien was immediately appointed acting Chief Executive Officer. In addition, Donald H. Layton was named Chairman of the Board, replacing former Chairman George Hayter. Mr. Hayter remains on the Board as a director. Mr. Layton is leading the previously announced executive search to fill the CEO position, for which Mr. Lilien and external candidates are being considered. The Company expects to announce its new CEO within the next 30-60 days.

About E*TRADE FINANCIAL

The E*TRADE FINANCIAL family of companies provides financial services including trading, investing, banking and lending for retail and institutional customers. Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Bank and lending products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries.

Important Notice

E*TRADE FINANCIAL, E*TRADE and the E*TRADE logo are trademarks or registered trademarks of E*TRADE FINANCIAL Corporation. The statements contained in this news release that are forward-looking are based on current expectations that are subject to a number of uncertainties and risks, and actual results may differ materially. The uncertainties and risks include, but are not limited to, changes in market activity, anticipated increases in the rate of new customer acquisition, the conversion of new visitors to the site to customers, the activity of customers and assets held at the institution, seasonality, the development and enhancement of products and services, competitive pressures (including price competition), system failures, economic and political conditions, changes in consumer behavior and the introduction of competing products having technological and/or other advantages. Further information about these risks and uncertainties can be found in the information included in the annual reports previously filed by E*TRADE FINANCIAL Corporation with the SEC on Form 10-K (including information under the caption "Risk Factors") and quarterly reports on Form 10-Q.

© 2008 E*TRADE FINANCIAL Corporation. All rights reserved.