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E-Trade Agrees to Pay Fiserv $23 Million

May 13, 2003|From Bloomberg News

E-Trade Group Inc., the third-largest online securities firm, agreed Monday to pay Fiserv Inc. $23 million to settle a complaint over a loan involving shares of GenesisIntermedia.com Inc.

Fiserv sued in October 2001, claiming Menlo Park. Calif.-based E-Trade refused to return $27 million it owed for a GenesisIntermedia.com stock loan.

Nomura Holdings Inc. and Wedbush Morgan Securities of Los Angeles have filed similar complaints, according to an E-Trade filing with the Securities and Exchange Commission.

E-Trade's earnings won't be affected by the settlement and the company plans to "vigorously defend itself" in the remaining lawsuits.

Fiserv said its earnings for the second quarter wouldn't be affected by the settlement. Fiserv handles checking, insurance and currency transactions and stock trades.

The SEC in September 2001 halted trading in GenesisIntermedia, a Los Angeles telemarketing company, to investigate whether someone manipulated its stock.

E-Trade was one of four brokerage firms that borrowed a total of 7.2 million GenesisIntermedia shares from MJK Clearing Inc., the clearing unit of Minneapolis-based brokerage Stockwalk Group Inc., in exchange for about $125 million.

MJK collapsed after it was unable to repay about $60 million to the firms.

Fiserv's shares rose 87 cents to $30.19 in Nasdaq trading.

Shares of E-Trade gained 13 cents to $6.23 in New York Stock Exchange trading.

News of the settlement came after the markets closed.

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