S&P cuts E*Trade

Standard & Poor's said it lowered its ratings on E*Trade Financial Corp. to B from BB- and on its subsidiary E*Trade Bank to BB- from BB+.

At the same time, the agency said it placed the ratings on CreditWatch with negative implications.

S&P noted that the ratings actions are driven by the company's expectations of additional write-downs of its investment securities in the fourth quarter coupled with our view of potential deterioration in its loan portfolios.

The agency also noted the potential for client attrition prompted by headline risk, a weakening balance sheet, SEC investigation and investor lawsuits.

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