eTrade 2006 Annual Report Download - page 16

ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
A summary of our significant locations at December 31, 2006 is shown in the following table. All facilities
are leased, except for 166,000 square feet of our office in Alpharetta, Georgia. Square footage amounts are net of
space that has been sublet or part of a facility restructuring.
Location Approximate Square Footage
Arlington, Virginia 209,000
Alpharetta, Georgia 184,000
Jersey City, New Jersey 107,000
Menlo Park, California 101,000
Charlotte, North Carolina 83,000
Sandy, Utah 80,000
New York, New York 60,000
Irvine, California 48,000
Toronto, Canada 37,000
Boston, Massachusetts 30,000
Tampa, Florida 30,000
All of our facilities are used by both our retail and institutional segments. In addition to the significant
facilities above, we also lease all of our 24 E*TRADE Financial Centers, ranging in space from 3,000 to 13,000
square feet. All other leased facilities with space of less than 25,000 square feet are not listed by location. We
believe our facilities space is adequate to meet our needs in 2007.
ITEM 3. LEGAL PROCEEDINGS
In June 2002, the Company acquired from MarketXT Holdings, Inc. (formerly known as “Tradescape
Corporation”) the following entities: Tradescape Securities, LLC; Tradescape Technologies, LLC; and
Momentum Securities, LLC. Disputes subsequently arose between the parties regarding the responsibility for
liabilities that first became known to the Company after the sale. On April 8, 2004, MarketXT filed a complaint
in the United States District Court for the Southern District of New York against the Company, certain of its
officers and directors, and other third parties, including Softbank Investment Corporation (“SBI”) and Softbank
Corporation, alleging that defendants were preventing plaintiffs from obtaining certain contingent payments
allegedly due, and as a result, claiming damages of $1.5 billion. On April 9, 2004, the Company filed a complaint
in the United States District Court for the Southern District of New York against certain directors and officers of
MarketXT seeking declaratory relief and unspecified monetary damages for defendants’ fraud in connection with
the 2002 sale, including, but not limited to, having presented the Company with fraudulent financial statements
regarding the condition of Momentum Securities, LLC during the due diligence process. Subsequently,
MarketXT was placed into bankruptcy, and the Company filed an adversary proceeding against MarketXT and
others in January 2005, seeking declaratory relief, compensatory and punitive damages, in those Chapter 11
bankruptcy proceedings in the United States Bankruptcy Court for the Southern District of New York entitled,
“In re MarketXT Holdings Corp., Debtor.” In that same court, the Company filed a separate adversary
proceeding against Omar Amanat in those Chapter 7 bankruptcy proceedings entitled, “In re Amanat, Omar
Shariff.” In October 2005, MarketXT answered the Company’s adversary proceeding and asserted its
counterclaims, subsequently amending its claims in 2006 to add a $326 million claim for “promissory estoppel”
in which Market XT alleged, for the first time, that the Company breached a prior promise to purchase the
acquired entities in 1999-2000. In April 2006, Omar Amanat answered the Company’s separate adversary
proceeding against him and asserted his counterclaims. In separate motions before the Bankruptcy Court, the
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