E*TRADE FINANCIAL Corporation (NASDAQ: ETFC) today announced that it will retire all $450 million of its 6.125% subordinated notes due 2018. The notes will be retired in connection with the issuance of 25 million shares of E*TRADE common stock on November 18, 2008, at an effective issue price of $18 per share. These notes are a part of the mandatory convertible debt securities E*TRADE issued in November 2005.

As stipulated by the terms of the notes, E*TRADE was required to attempt a remarketing to purchasers willing to pay par for the remarketed notes. As expected, the current turmoil in the credit markets prevented a successful remarketing. There will be no net receipt or outlay of cash by E*TRADE in connection with the issuance of the common stock and retirement of the notes.

About E*TRADE FINANCIAL

The E*TRADE FINANCIAL family of companies provides financial services including trading, investing and banking for retail and institutional customers. Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Bank products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries.

Important Notice

E*TRADE FINANCIAL, E*TRADE and the E*TRADE logo are trademarks or registered trademarks of E*TRADE FINANCIAL Corporation. The statements contained in this news release that are forward-looking are based on current expectations that are subject to a number of uncertainties and risks, and actual results may differ materially. The uncertainties and risks include, but are not limited to, changes in market activity, anticipated increases in the rate of new customer acquisition, the conversion of new visitors to the site to customers, the activity of customers and assets held at the institution, seasonality, macro trends of the economy in general and the residential real estate market, instability in the consumer credit markets and credit trends, rising mortgage interest rates, tighter mortgage lending guidelines across the industry, increased mortgage loan delinquency and default rates, portfolio growth, portfolio seasoning and resolution through collections, sales or charge-offs, the development and enhancement of products and services, competitive pressures (including price competition), system failures, economic and political conditions, changes in consumer behavior and the introduction of competing products having technological and/or other advantages. Further information about these risks and uncertainties can be found in the information included in the annual reports previously filed by E*TRADE FINANCIAL Corporation with the SEC on Form 10-K (including information under the caption Risk Factors) and quarterly reports on Form 10-Q.

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