E*Trade Financial Corp., the New York-based online brokerage, will pay $79 million to settle a shareholder lawsuit over losses from mortgages and home-equity loans.
E*Trade announced the settlement in a regulatory filing today. The agreement requires the company to pay $10.75 million, which will be reflected as an expense in the fourth quarter of this year, with the balance paid by insurance carriers, according to the filing.
The lawsuit and other similar class actions were filed in 2007 based on claims that company officers violated their fiduciary duties to shareholders concerning losses in E*Trade’s portfolio of mortgages and home equity loans, according to the filing. As part of the settlement E*Trade officials deny any wrongdoing.
The case is Freudenberg v. E*Trade Financial Corp., U.S. District Court, Southern District of New York (Foley Square).