eTrade 2002 Annual Report Download - page 32

Table of Contents
Index to Financial Statements
maintain the required net capital it may be subject to suspension or revocation of its registration by the SEC and suspension or expulsion by the
NYSE and/or NASD. Such failures could ultimately lead to the firm’ s liquidation. Similarly, banks are subject to various regulatory capital
requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory—and
possibly additional discretionary—actions by regulators that, if undertaken, could have a direct material effect on a bank’ s operations and
financial statements.
Item 2.Properties
Our principal locations, most of which are leased by us, are as follows:
Location Business Segment Use Approximatesize
(insquarefeet)
Rancho Cordova,
California
Administration, Domestic Retail Brokerage 273,000
Chicago, Illinois Domestic Retail Brokerage 200,000
Alpharetta, Georgia Administration and Domestic Retail Brokerage 165,000
Arlington, Virginia Administration and Banking 161,000
Menlo Park, California Administration and Domestic Retail Brokerage 132,000
New York, New York Administration, Domestic Retail Brokerage and Global and
Institutional
90,000
Huntington Beach,
California
Banking 72,000
Costa Mesa, California Banking 59,000
Our Domestic Retail Brokerage, Banking and Wealth Management businesses lease a number of additional facilities in the United States. Our
Global and Institutional business leases facilities in Canada, Southeast Asia and Europe. We also lease facilities in New York City, Boston,
Beverly Hills, Denver and San Francisco where our E*TRADE Financial Centers are located. These leases expire at various dates through
2013.
In fiscal 2001, we restructured many of our existing facilities and consolidated some sites creating additional space available for sublease.
These additional facilities are not included above. See Note 21 in Item 8. Consolidated Financial Statements and Supplementary Data for a
discussion of facility restructuring and other exit activity.
We believe that our facilities are adequate for current needs and that additional or substitute space will be available as needed to accommodate
any future expansion of our operations.
Item 3. Legal and Administrative Proceedings
On November 21, 1997, a putative class action was filed in the Superior Court of California, County of Santa Clara, by Larry R. Cooper. The
action alleges, among other things, that our advertising regarding our commission rates and ability to execute transactions through our online
brokerage service was false and deceptive. The action seeks injunctive relief, and unspecified compensatory damages, punitive damages, and
attorney’ s fees. On June 1, 1999, the Court entered an order denying Plaintiffs’ motion for class certification. On January 25, 2000, the Court
ordered plaintiff to submit all claims seeking monetary relief to arbitration and stayed all other claims pending the outcome of arbitration. In
July 2001, Plaintiff filed an arbitration claim with the National Association of Securities Dealers, Inc. (“NASD”), and in October 2001, we
submitted our answer. Subsequently, an NASD arbitration panel issued a ruling indicating that it would not assert jurisdiction over plaintiff’ s
representative claims and scheduled the hearing of Plaintiff’ s individual claims for arbitration for October 14, 2002. Thereafter, the NASD
cancelled the October 14, 2002 hearing of this arbitration and rescheduled this arbitration to May 12, 2003. At this time, we are unable to
predict the ultimate outcome of this matter.
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2003. EDGAR Online, Inc.