E*Trade Names Freiberg CEO, Plans 1-for-10 Reverse Stock Split
E*Trade Financial Corp., the online brokerage that hasn’t posted a quarterly profit since 2007, named Steven Freiberg chief executive officer two weeks after saying its preferred candidate was no longer a possibility. The company’s board also approved a 1-for-10 reverse stock split.
Freiberg, 53, joins New York-based E*Trade from Citigroup Inc., where he’d worked for three decades, according to today’s statement. He was reassigned from his job overseeing credit cards at New York-based Citigroup in January 2009, when the company shifted businesses it wants to exit into a new division called Citi Holdings Inc.
He replaces Robert Druskin, who remains chairman. Druskin was named interim CEO in December after E*Trade failed to find a permanent replacement for Donald Layton, who helped save the online brokerage from collapse.
E*Trade, the fourth-largest online brokerage by client assets, has lost $3.58 billion since the third quarter of 2007 because of customer defaults on home loans. While Layton failed to return the company to profitability, he reduced costs by swapping $1.7 billion of debt into zero-coupon convertible bonds. He was asked to serve as CEO through December 2009 in March 2008, three months after E*Trade received a $2.5 billion cash infusion from hedge-fund manager Citadel Investment Group LLC, now its largest shareholder.
E*Trade shares have fallen 11 percent to $1.57 this year, compared with the 2.7 percent advance by the NYSE Arca Securities Broker/Dealer Index.