WSJ article:
Tech Center
Investor's Lawsuit Asserts Failure
To Maintain Access by E*Trade
By DANIELLE SESSA
Staff Reporter of THE WALL STREET JOURNAL
An investor asserted in a lawsuit that E*Trade Group Inc. failed to provide
all-day access to the online-trading firm's customer accounts.
The suit, filed by Coleen Divito in Santa Clara, Calif., Superior Court
Monday, seeks unspecified damages from what the investor says was an
inability to execute online trades at certain times last week.
A series of system crashes at E*Trade's Web site last week locked out
some customers from their accounts and embarrassed the fast-growing
brokerage firm. The suit, which seeks class-action status, alleges that the
system failures constitute unfair business practices because E*Trade
advertises 24-hour account availability.
Susan Walker, an E*Trade spokeswoman, didn't have an immediate
comment on the suit, saying the Palo Alto, Calif., company is "still
investigating and reviewing the information."
Separately, several E*Trade executives filed with the U.S. Securities and
Exchange Commission this week to sell 297,000 shares of the company's
stock. Chief Executive Christos M. Cotsakos registered to sell 140,000
shares on behalf of a family trust fund, representing a 4% reduction of his
position, according to the filing.
Last week, other company insiders and beneficiaries filed to sell 4.7 million
shares, according to First Call-Investnet, a Rockville, Md., concern that
tracks insider data. The bulk of the sales came from General Atlantic
Partners LP, a venture-capital firm, which reduced its holdings 48% by
selling 4.2 million shares.
"This is an open window for executives and employees at E*Trade, so as
part of that, some executives will be balancing their own personal investment
portfolios," said E*Trade spokesman Dave Murray.
E*Trade Thursday rose $5.50 to $48.25 a share in Nasdaq Stock Market
trading.
Meanwhile, executives at another online broker also have recently unloaded
some shares. Since late January, Charles Schwab Corp. insiders have filed
to sell 1.6 million shares, according to First Call-Investnet. Chairman Charles
Schwab filed papers with the SEC this week Thursday to sell 50,000 shares,
bringing the total he has filed to sell since late January to 928,125 shares,
roughly a 2% reduction of his position. Charles Schwab shares rose $4 to
$67 in Big Board composite trading.
"These sales are a minute portion of Mr. Schwab's overall holdings in the
company, and it does not represent a change in his commitment to the firm,"
said Glen Mathison, a Schwab spokesman. |
