E*Trade has abruptly replaced its chief executive, as the beleaguered online brokerage continues to overhaul its business.
On Thursday, E*Trade named Frank J. Petrilli, the board chairman, the interim leader, following the departure of Steven J. Freiberg. The company has started a search for a permanent C.E.O.
“E*Trade is a fantastic company with an enduring and iconic brand, a top-notch product and service offering, and a dedicated senior management team,†Mr. Petrilli said in a statement. “The company recently implemented a refined business strategy, centered on strengthening the firm's financial position, while continuing to focus on the core brokerage business.
The management shake-up comes as E*Trade tries to find its footing.
The brokerage has been struggling since the collapse of the housing market. The company, which also owns a savings and loan, ventured heavily into mortgages, a move that left the company reeling in 2007. At the time , Citadel, the hedge fund, stepped in with $2.5 billion in aid.
But the relationship between the two firms soured. Last year, Citadel, which was founded by Kenneth C. Griffin, publicly pushed the brokerage to change to its board and sell itself. In a letter, the hedge fund said E*Trade directors had “squandered†a “phenomenal franchise.â€
Following the criticism, E*Trade hired Goldman Sachs to help explore a potential deal. But ultimately the brokerage called off plans to sell itself and decided to implement its own turnaround effort.
Since then, the company has made some strides to refocus its business and cut costs. But its shares have struggled, falling to roughly $8 from a peak of more than $12. On Thursday, the stock jumped more than 6 percent on news of the management change.
Mr. Petrilli, the former chief executive of Surge Trading who has been board chairman since January, said the board needed a “new leader to guide the company throu gh the next phase of its evolution.†The search committee include Mr. Griffin, Mr. Petrilli and three other board members.
