E-Trade Financial and its insurers have agreed to pay $79 million to settle class action lawsuits brought against the online brokerage as a result of losses in its mortgage and home equity loans portfolio in 2007. E-Trade was sued by investors who alleged the company violated securities law and breached its fiduciary duty to shareholders in relation to the massive losses it suffered following the collapse of the subprime mortgage market.
The company claimed the losses incurred were caused by a “worldwide economic catastrophe” and that it has not violated the law. E-Trade’s portion of the settlement payment is around $10.75 million with the balance being paid by its insurance carrier. The agreement requires court approval to become final. It is expected that the court will decide that issue in the first quarter of this year.
Source: Insurance Journal
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