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#1
11-12-2007, 11:30 AM
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Etrade Potential Bankruptcy?
November 12, 2007
This is a challenging time for the financial services industry. Bad news in the credit, housing, and stock markets continues to dominate and E*TRADE is not immune to these market conditions. However, you, our customers, should know that we continue to be well capitalized by regulatory standards. As a matter of fact, we could absorb an immediate write down in excess of $1 billion and still remain well capitalized. Nobody knows for certain what the ultimate impact will be from these markets, but it is our expectation that news in the market will get worse before it gets better and, armed with these expectations, we are taking prudent measures to effectively manage the company's balance sheet. We will continue to earn your confidence, providing state-of-the-art asset protection, including E*TRADE's Complete Protection Guarantee, SIPC Protection for E*TRADE Securities customers and FDIC Insurance for E*TRADE Bank customers. We appreciate the opportunity to continue to serve you and your investing needs. Are my stock holdings insured/protected or is it possible that I will lose these holdings if they go bankrupt? 
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#2
11-12-2007, 11:47 AM
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Re: Etrade Potential Bankruptcy?
I think it is possible you could lose your stock holdings. As far as Etrade's bankruptcy potential, this is what one analyst is saying..
"Citi Investment Research analyst Prashant Bhatia cut E-Trade's rating to "Sell" from "Hold." Bhatia said there is a 15 percent chance E-Trade will have to declare bankruptcy and the company may be forced to sell loans and securities at a significant discount." Etrade's stock looks to be down 50%, good time to buy or too risky?
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#3
11-12-2007, 11:52 AM
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Re: Etrade Potential Bankruptcy?
SIPC standard insurance is 500,000 with a 100,000 sub-limit for cash for your brokerage account. I would guess that ETrade has an Excess SIPC insurance that would insure your account even further.
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#4
11-12-2007, 12:55 PM
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Re: Etrade Potential Bankruptcy?
[ QUOTE ]
SIPC standard insurance is 500,000 with a 100,000 sub-limit for cash for your brokerage account. I would guess that ETrade has an Excess SIPC insurance that would insure your account even further. [/ QUOTE ] Sounds correct^^^ But as to E-Trade declaring BR...your stocks are held in a clearing house,unless they self-clear,and they are required to insure anyway under SEC/NASD rules Many small brokers have gone under/bankrupt with many investors in a panic over their holdings.Until they find another BD to deal with it is DEF. a hassle. Most B/Ds have separate clearing houses,where your stocks are held in street name,and even if the BD falters....your stock holdings are insured and SAFE until they find a new BD home [img]/images/graemlins/smile.gif[/img] It can be a pain in the Azzz to gain access to them,move them to another company,esp if a stock is falling and you want to sell It is similar to an ACAT transfer...which is when you transfer your existing holdings/portfolio from one broker to another.It usually takes about a week or so....but you cant sell any holdings until the receiving BD takes control of the account.Again it sucks if your stocks are affected in an up/down/volitile market for that matter during this wait,and esp during a market like this one E-Trade declaring bankruprtcy,has NOTHING to do with your holdings...their comments regarding liquidating securities most likely means THEIR OWN holdings Find out from E-Trade who they clear through...and we can go from there? But RELAX! Stephen [img]/images/graemlins/cool.gif[/img] ****All B/D's have a minumum net capital requiremnt based on their size,that they are required to maintain....periodic statements/disclosures regarding these financial details are required as well. I would believe with E-Trade being one of biggest on-line firms...not only will they be OK...any # the big firms would jump at a cheap opp. to service your accounts if they had to sell/merge the company
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#5
11-12-2007, 01:11 PM
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Re: Etrade Potential Bankruptcy?
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#7
11-14-2007, 01:21 AM
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Re: Etrade Potential Bankruptcy?
[ QUOTE ]
SIPC standard insurance is 500,000 with a 100,000 sub-limit for cash for your brokerage account. I would guess that ETrade has an Excess SIPC insurance that would insure your account even further. [/ QUOTE ] okay so anyone.... explain this to me. if someone bought $750,000 worth of mutual funds 8 years ago under Scudder Funds which later got bought out by CSFB (Credit Suisse) (and lets say $250,000 in stocks were purchased under Credit Suisse), and then later by DLJ Direct, then by Harris Investments, and then by ETrade... (or something close to that scenario) you're saying that these funds are PERFECTLY safe being held in the ETrade brokerage account? if ETrade goes belly up will a person be able to move them to another brokerage company within 1 week? how does the $500,000 gov't insurance play into this. i assume it must be for something else other than the mutual fund holdings referred to above. appreciate your help. thanks. [ QUOTE ] Your CASH is insured up to $100k per account and stocks INSURED up to $500k. They are SAFE!! However...if you still feel uncomfortable...move your account to another BD [/ QUOTE ] this is what i want to know. what stocks are insured to $500k????? also if a person has a large cash position over 100k they can put half in the etrade savings earning about 4.7% and the other half in the etrade money market earning crap. i believe this gives you 100k insurance on both. was also told that if you fax them beneficiary info that the coverage doubles to 200k on each. anyone know if this is true?? again thanks.
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#8
11-14-2007, 03:36 AM
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Re: Etrade Potential Bankruptcy?
[ QUOTE ]
[ QUOTE ] SIPC standard insurance is 500,000 with a 100,000 sub-limit for cash for your brokerage account. I would guess that ETrade has an Excess SIPC insurance that would insure your account even further. [/ QUOTE ] okay so anyone.... explain this to me. if someone bought $750,000 worth of mutual funds 8 years ago under Scudder Funds which later got bought out by CSFB (Credit Suisse) (and lets say $250,000 in stocks were purchased under Credit Suisse), and then later by DLJ Direct, then by Harris Investments, and then by ETrade... (or something close to that scenario) you're saying that these funds are PERFECTLY safe being held in the ETrade brokerage account? if ETrade goes belly up will a person be able to move them to another brokerage company within 1 week? how does the $500,000 gov't insurance play into this. i assume it must be for something else other than the mutual fund holdings referred to above. appreciate your help. thanks. [ QUOTE ] Your CASH is insured up to $100k per account and stocks INSURED up to $500k. They are SAFE!! However...if you still feel uncomfortable...move your account to another BD [/ QUOTE ] this is what i want to know. what stocks are insured to $500k????? also if a person has a large cash position over 100k they can put half in the etrade savings earning about 4.7% and the other half in the etrade money market earning crap. i believe this gives you 100k insurance on both. was also told that if you fax them beneficiary info that the coverage doubles to 200k on each. anyone know if this is true?? again thanks. [/ QUOTE ] You could always try something insanely radical, like... reading about the supplemental insurance on the ETrade website.
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#10
11-13-2007, 02:11 AM
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Re: Etrade Potential Bankruptcy?
[ QUOTE ]
As far as Etrade's bankruptcy potential, this is what one analyst is saying.. "Citi Investment Research analyst Prashant Bhatia cut E-Trade's rating to "Sell" from "Hold." Bhatia said there is a 15 percent chance E-Trade will have to declare bankruptcy and the company may be forced to sell loans and securities at a significant discount." [/ QUOTE ] LOL, if that ain't the pot calling the kettle black. Pretty nervy of Citigroup.
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