8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of report: June 30, 2009

(Date of earliest event reported)

E*TRADE Financial Corporation

(Exact name of Registrant as Specified in its Charter)

Delaware	1-11921	94-2844166
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)

135 East 57th Street, New York, New York 10022

(Address of Principal Executive Offices and Zip Code)

(646) 521-4300

(Registrant’s Telephone Number, including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement

On June 30, 2009, the Company amended its Stockholder Rights Plan to expressly exempt underwriters, initial purchasers or other selling group members who acquire or have the right to acquire the Company’s common stock or securities convertible into or exchangeable for the Company’s common stock pursuant to customary agreements with and between underwriters, initial purchasers or selling group members with respect to bona fide public offerings of such securities or a private placement of such securities pursuant to an exemption under the Securities Act of 1933, as amended.

The above description of the terms of the amendment to the Company’s Stockholder Rights Plan is a summary and does not purport to be complete, and is qualified in its entirety by reference to the copy of the Rights Agreement Amendment, attached hereto as Exhibit 4.1 and incorporated herein by reference.

Item 8.01. Other Events

As previously announced, the Company launched its debt exchange offer for certain of its outstanding high-yield notes (the “Exchange Offer”), on the terms and subject to the conditions set forth in the Offering Memorandum and Consent Solicitation Statement, dated June 22, 2009 (the “Offering Memorandum”), and the related letter of transmittal (the “Letter of Transmittal”).  Pursuant to the Exchange Offer, the Company is offering to exchange more than $1 billion of newly-issued zero coupon Convertible Debentures due 2019 (the “Debentures”) for all of its 8% Senior Notes due 2011 (the “2011 Notes”) and a portion of its 12.5% Springing Lien Notes due 2017 (the “2017 Notes”, and together with the 2011 Notes, the “Notes”). The complete terms and conditions of the Exchange Offer are set forth in the Offering Memorandum and the Letter of Transmittal that have been sent to holders of the Notes.

Notwithstanding disclosure to the contrary in the Offering Memorandum regarding the ranking of the Debentures, the indenture that will govern the Debentures, the form of which is filed as Exhibit TC3 to the Company’s Form T-3 filed on June 22, 2009, will provide that any lien incurred pursuant to Section 4.20 of the indenture governing the 2017 Notes will cause the Debentures to be equally and ratably secured.  This disclosure corrects and supersedes disclosure in the Offering Memorandum to the effect that the Debentures will be subordinated in right of payment to the 2017 Notes to the extent such 2017 Notes are secured in the future.

Further information regarding the Exchange Offer may be found in the Company’s Current Reports on Form 8-K filed on June 17, 2009, June 19, 2009 and June 22, 2009, the press release announcing the launch of the Exchange Offer attached to the 8-K filed on June 22, 2009 as Exhibit 99.1 and incorporated by reference herein and the Company’s Form T-3 Application for Qualification of Indentures under the Trust Indenture Act of 1939 filed on June 22, 2009, including the form of indenture that will govern the Debentures, the Offering Memorandum and the Letter of Transmittal, all of which are filed as exhibits thereto.

Item 9.01. Financial Statements and Exhibits.

(d)  Exhibits.

Exhibit No.	Description
4.1	Third Amendment to Rights Agreement, dated as of June 30, 2009, by and between E*TRADE Financial Corporation and American Stock Transfer & Trust Company, as Rights Agent

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		E*TRADE FINANCIAL CORPORATION
Date:	June 30, 2009	By:	/s/ Karl A. Roessner
			Name:	Karl A. Roessner
			Title:	Corporate Secretary

EXHIBIT INDEX

Exhibit No.	Description
4.1	Third Amendment to Rights Agreement, dated as of June 30, 2009, by and between E*TRADE Financial Corporation and American Stock Transfer & Trust Company, as Rights Agent

EX-4.1

Exhibit 4.1

THIRD AMENDMENT TO RIGHTS AGREEMENT

This Amendment dated as of June 30, 2009 (this “Amendment”) between E*TRADE Financial Corporation (formerly known as E*TRADE Group, Inc.), a Delaware corporation (the “Company”), and American Stock Transfer and Trust Company, as Rights Agent (the “Rights Agent”) amends the Rights Agreement, dated as of July 9, 2001, as amended (the “Rights Agreement”), between the Company and the Rights Agent.  Capitalized terms used herein and not defined shall have the meanings specified in the Rights Agreement.

WHEREAS, the Company and the Rights Agent are parties to the Rights Agreement;

WHEREAS, Section 27 of the Rights Agreement permits the Company to amend the Rights Agreement on the terms set forth in this Amendment;

WHEREAS, the Board of Directors of the Company has determined that it is in the best interests of the Company and its shareholders to modify the terms of the Rights Agreement to exempt the acquisition of securities pursuant to customary agreements related to securities offerings; and

WHEREAS, all acts and things necessary to make this Amendment a valid agreement, enforceable according to its terms have been done and performed, and the execution and delivery of this Amendment by the Company and the Rights Agent have been in all respects duly authorized by the Company and the Rights Agent.

NOW, THEREFORE, in consideration of the promises and mutual agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Company and the Rights Agent hereby agree as follows:

A.           Amendment of Certain Definitions.

The definition of “Beneficial Owner” in Section 1 of the Rights Agreement is hereby amended to read in its entirety as follows:

“A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to “beneficially own”, any securities:

(a)           that such Person or any of its Affiliates or Associates, directly or indirectly, beneficially owns (as determined pursuant to Rule 13d-3 under the Exchange Act as in effect on the date hereof) (other than securities acquired pursuant to customary agreements with and between underwriters, initial purchasers or selling group members with respect to a bona fide public offering of such securities, or a private placement of securities pursuant to an exemption under the Securities Act, by the Company);

(b)           that such Person or any of its Affiliates or Associates, directly or indirectly, has

(i)           the right to acquire (whether such right is exercisable immediately or only upon the occurrence of certain events or the passage of time or both) pursuant to any agreement, arrangement or understanding (whether or not in writing) (other than customary agreements with and between underwriters, initial purchasers or selling group members with respect to a bona fide public offering of such securities, or a private placement of securities pursuant to an exemption under the Securities Act, by the Company) or otherwise (other than pursuant to the Rights); provided that a Person shall not be deemed the “Beneficial Owner” of or to “beneficially own” securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of its Affiliates or Associates until such tendered securities are accepted for payment or exchange; or

(ii)           the right to vote (whether such right is exercisable immediately or only upon the occurrence of certain events or the passage of time or both) pursuant to any agreement, arrangement or understanding (whether or not in writing) or otherwise; provided that a Person shall not be deemed the “Beneficial Owner” of or to “beneficially own” any security under this clause (ii) as a result of an agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding (A) arises solely from a revocable proxy or consent given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations under the Exchange Act and (B) is not also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); or

(c)           that are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person or any of its Affiliates or Associates has any agreement, arrangement or understanding (whether or not in writing) (other than customary agreements with and between underwriters, initial purchasers or selling group members with respect to a bona fide public offering of such securities, or a private placement of securities pursuant to an exemption under the Securities Act, by the Company) for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in subparagraph (b)(ii) immediately above) or disposing of any such securities.”

B.           Effect of Amendment.  Except as expressly set forth herein, the Rights Agreement shall not by implication or otherwise be supplemented or amended by virtue of this Amendment, but shall remain in full force and effect, as amended hereby.  This Amendment shall be construed in accordance with and as a part of the Rights Agreement, and all terms, conditions, representations, warranties, covenants and agreements set forth in the Rights Agreement and each other instrument or agreement referred to therein, except as herein amended, are hereby ratified and confirmed.  To the extent that there is a conflict between the terms and provisions of the Rights Agreement and this Amendment, the terms and provisions of this Amendment shall govern for purposes of the subject matter of this Amendment only.

C.           Waiver of Notice.  The Rights Agent and the Company hereby waive any notice requirement with respect to each other under the Rights Agreement, if any, pertaining to the matters covered by this Amendment.

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D.           Severability.  If any provision, covenant or restriction of this Amendment is held by a court of competent jurisdiction or other authority to be invalid, illegal or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment shall remain in full force and effect and shall in no way be effected, impaired or invalidated.

E.           Governing Law.  This Amendment shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such state applicable to contracts to be made and performed entirely within such state, except that the rights and obligations of the Rights Agent shall be governed by the law of the State of New York.

F.           Counterparts.  This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

G.           Effective Date of Amendment.  This Amendment shall be deemed effective as of the date first written above, as if executed on such date.

H.           Descriptive Headings.  Descriptive headings appear herein for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first written above.

E*TRADE FINANCIAL CORPORATION
By:	/s/ Karl Roessner
	Name:	Karl Roessner
	Title:	General Counsel

AMERICAN STOCK TRANSFER & TRUST COMPANY
By:	/s/ Herbert Lemmer
	Name:	Herbert Lemmer
	Title:	Vice President

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