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NIKKI GREENBERG, et al v.E*TRADE FINANCIAL CORPORATIONLos Angeles Superior CourtCase No. BC 360152NOTICE OF PENDENCY ANDSETTLEMENT OF CLASS ACTION

NOTICE OF CLASS ACTION SETTLEMENTATTENTION ALL PERSONS IN CALIFORNIA, FLORIDA, MARYLAND,MASSACHUSETTS, NEVADA, NEW HAMPSHIRE, PENNSYLVANIA, ANDWASHINGTON WHO HAD TELEPHONE CALLS WITH E*TRADE. YOUMAY BE ENTITLED TO FILE A CLAIM FOR MONETARY RECOVERY.

If you reside in California, Florida, Maryland, Massachusetts, Nevada, New Hampshire,Pennsylvania, or Washington and (1) received a telephone call from E*TRADE

FINANCIAL Corporation or its related entities (“E*TRADE”) during the period fromSeptember 3, 2003, to May 22, 2009, and/ or (2) you made a call to E*TRADE’s Beverly

Hills, California branch office on August 15 or 16, 2006, and your telephone call wasrecorded without notice or consent

(hereinafter, the “Settlement Class”)

, you are a Class

Member and a proposed class action settlement (“Settlement”) could affect your legal

rights.PLEASE TAKE NOTICE that if you qualify to be in the Settlement Class, you are aSettlement Class Member

(hereinafter, “Class Member”)

and may be entitled to paymentof money from the Settlement Funds.There is now pending in the Los Angeles County Superior Court a lawsuit entitled

Greenberg, et al. v. E*TRADE FINANCIAL Corporation

, case no. BC 360152, whichinvolves allegations that

Defendant E*TRADE FINANCIAL Corporation (“

Defendant

”)

recorded telephone communications without the knowledge or consent of all of theparties to the communication. Defendant has denied and continues to deny any liabilityand there has been no finding that Defendant has violated any laws.

THE ACTION AND THE SETTLEMENT

This class action arose out of allegations regarding Defendant recording telephone callswithout always giving notification at the beginning of every call that the call may berecorded and/or obtaining consent to recording. Representative Plaintiff

’

s allegations inthe Complaint are that Defendant recorded telephone calls without the knowledge orconsent of the parties to the telephone call, in violation of applicable privacy and/orrecording statutes. Representative Plaintiff sought fixed damages under the applicableprivacy and/or recording statutes, injunctive relie

f, and an award of attorneys’ fees and

costs.Defendant has denied liability and maintains that its recording policy and practicesprovided notice of, and obtained consent to, the recording of telephone calls, that itsautomated notice of recording on all incoming calls and the notice provisions in itsaccount agreements gave the parties a reasonable expectation that the call may berecorded, that the telephone calls were not private confidential communications under theapplicable recording statutes, and that it complied with all statutory provisions. As such,Defendant disputes all allegations and claims set forth in the Complaint.However, both parties have nonetheless decided to negotiate a settlement of this action in

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order to avoid the burden, expense and uncertainty of further litigation. Further, bothparties, after a thorough investigation of the facts and applicable law concerning allclaims and defenses, have agreed that the proposed settlement is in the best interest of allClass Members and that the proposed settlement is fair, reasonable and adequate.Without admitting liability, the Defendant has agreed to pay a total amount of sevenmillion five hundred thousand dollars ($7,500,000) in settlement (

the “Common Fund”).

The Common Fund, le

ss any attorneys’ fees and costs awarded by the Court to Class

Counsel, will be the Settlement Funds. Subject to approval by the Court, eighty thousanddollars ($80,000) from the Settlement Funds will be paid to Representative Plaintiff. If any of the Settlement Funds remain after payment of all claims of Class Members andRepresentative Plaintiff, such funds will be paid to a charitable organization(s) qualifiedunder 501(c)(3) of the Internal Revenue Code as more fully set forth in the SettlementAgreement and Release.Subject to approval of the settlement by the Court, each member of the Settlement Classwho does not request exclusion from the class as described below shall be entitled to anindividual settlement amount. The maximum individual settlement amount for a ClassMember who was residing in California during the class period is $5,000 and themaximum individual settlement amount for a Class Member who was residing in Florida,Maryland, Massachusetts, Nevada, New Hampshire, Pennsylvania, or Washington duringthe class period is $1,000. If there are insufficient Settlement Funds to pay all claimantsthe maximum amount, payments to the Class Members will be prorated by: (1) dividingthe Settlement Funds less $80,000 by the sum of five times the number of authorizedclaimants from California plus the number of authorized claimants from states other thanCalifornia

(“

Base Settlement A

mount”), and (

2) distributing five times the BaseSettlement Amount to each Class Member who was residing in California during theclass period, and distributing the Base Settlement Amount to each Class Member whowas residing in Florida, Maryland, Massachusetts, Nevada, New Hampshire,Pennsylvania, or Washington during the class period.

FINAL JUDGMENT AND RELEASE OF ALL CLAIMS

If the Court approves the proposed settlement, it will enter a final judgment in the actionon the merits as to all Class Members who do not request to be excluded from theSettlement Class. All Class Members who submit claims, and all Class Members who donot validly and timely request to be excluded from the proposed settlement, shall besubject to a binding judgment in favor of the Defendant under res judicata. All suchClass Members shall be forever barred from prosecuting their own lawsuits and shall bedeemed to have released Defendant and its agents from all claims, causes of action orlosses of any kind whatsoever relating to privacy rights or the recording of telephonecalls which any Class Member has or may claim to have against such persons which arebased upon, arising out of, or in any way relating to any of the acts, omissions or otherconduct that have or could have been alleged or otherwise referred to in the action.

FINAL FAIRNESS AND APPROVAL HEARING

On October 16, 2009, at 9:00 a.m., a hearing will be held on the fairness of the proposedsettlement. At the hearing, the Court will be available to hear any objections andarguments concerning the fairness of the proposed settlement. The hearing will takeplace before Judge Carolyn B. Kuhl in Department 323 of the Los Angeles SuperiorCourt, Central Civil West Courthouse, located at 600 S. Commonwealth Ave., LosAngeles, California, 90005

(hereinafter, the “Court”)

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HOW TO MAKE A CLAIM

Subject to the approval of the settlement by the Court, if you want to participate in thesettlement, you must complete and submit online the Claim Form that is available on theInternet at the following web address: www.GreenbergClassActionSettlement.com nolater than September 25, 2009.If you choose to participate in the settlement by submitting a Claim Form, you will bebound by all of the provisions of the Settlement Agreement and Release, including a fullrelease of claims that will prevent you from separately suing Defendant and its agents.

TO EXCLUDE YOURSELF FROM THE SETTLEMENT

You have the right to exclude yourself from the Settlement Class and the settlement. If you wish to be excluded, you must complete and send a written Request for Exclusion,containing your name, address, signature, and a statement that you meet the criteria of theSettlement Class but wish to be excluded from the Settlement Class, postmarked no laterthan September 25, 2009, to the Claims Administrator at the following address, withcopies sent to Class Couns

el and Defendant’s Counsel

:Claims Administrator:Greenberg Settlement AdministratorPO Box 6659Portland, OR 97228-6659Class Counsel:Paul R. Kiesel, Esq.Kiesel, Boucher, & Larson LLP8648 Wilshire BoulevardBeverly Hills, California 90211Neville Johnson, Esq.Johnson & Johnson LLP,439 North Canon Drive, Suite 200Beverly Hills, California 90210

Defendant’s Counsel:

Perrie M. Weiner, Esq.Edward T. Totino, Esq.DLA Piper LLP (US)1999 Avenue of the Stars, Suite 400Los Angeles, California 90067A short statement of your reason for wanting to be excluded from the Settlement Class isalso requested, but it is not required for your request to be valid. If you timely andvalidly request exclusion from the Settlement Class, you will be excluded from theSettlement Class, and you will not be bound by the judgment entered in the action.

TO OBJECT TO THE SETTLEMENT

If you wish to object to the settlement, you must file a written objection and/or a Notice