Pursuant to the Exchange Offer, E*TRADE proposes to exchange approximately $1.7 billion of its existing high yield notes for an equal aggregate principal amount of new zero coupon senior convertible debentures due 2019.

The complete terms and conditions of the Exchange Offer are set forth in the Offering Memorandum dated June 22, 2009 and the related letter of transmittal sent to holders of the Notes. Completion of the Exchange Offer remains subject to shareholder approval at a special meeting of shareholders, which is currently scheduled for August 19, 2009.

About E*TRADE FINANCIAL

The E*TRADE FINANCIAL family of companies provides financial services including trading, investing and related banking products and services to retail investors. 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 Notices

E*TRADE FINANCIAL, E*TRADE and the E*TRADE logo are trademarks or registered trademarks of E*TRADE FINANCIAL Corporation.

Forward-Looking Statements. 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. Such statements include those relating to the ability of the Company to complete the Exchange Offer. The uncertainties and risks include, but are not limited to, potential negative regulatory consequences resulting from actions by the OTS or other regulators, potential failure to obtain shareholder approval for the Exchange Offer and related matters.