Class Notice Full Notice

NIKKI GREENBERG, et al v. E*TRADE FINANCIAL CORPORATION

Los Angeles Superior Court Case No. BC 360152 NOTICE OF PENDENCY AND SETTLEMENT OF CLASS ACTION

NOTICE OF CLASS ACTION SETTLEMENT ATTENTION ALL PERSONS IN CALIFORNIA, FLORIDA, MARYLAND, MASSACHUSETTS, NEVADA, NEW HAMPSHIRE, PENNSYLVANIA, AND WASHINGTON WHO HAD TELEPHONE CALLS WITH E*TRADE. YOU MAY 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 from September 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 was recorded 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 a Settlement Class Member (hereinafter, “Class Member”) and may be entitled to payment of 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, which involves allegations that Defendant E*TRADE FINANCIAL Corporation (“Defendant”) recorded telephone communications without the knowledge or consent of all of the parties to the communication. Defendant has denied and continues to deny any liability and 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 calls without always giving notification at the beginning of every call that the call may be recorded and/or obtaining consent to recording. Representative Plaintiff’s allegations in the Complaint are that Defendant recorded telephone calls without the knowledge or consent of the parties to the telephone call, in violation of applicable privacy and/or recording statutes. Representative Plaintiff sought fixed damages under the applicable privacy and/or recording statutes, injunctive relief, and an award of attorneys’ fees and costs. Defendant has denied liability and maintains that its recording policy and practices provided notice of, and obtained consent to, the recording of telephone calls, that its automated notice of recording on all incoming calls and the notice provisions in its account agreements gave the parties a reasonable expectation that the call may be recorded, that the telephone calls were not private confidential communications under the applicable 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 Page 1 of 4 WEST\21731307.1

order to avoid the burden, expense and uncertainty of further litigation. Further, both parties, after a thorough investigation of the facts and applicable law concerning all claims and defenses, have agreed that the proposed settlement is in the best interest of all Class Members and that the proposed settlement is fair, reasonable and adequate. Without admitting liability, the Defendant has agreed to pay a total amount of seven million five hundred thousand dollars ($7,500,000) in settlement (the “Common Fund”). The Common Fund, less any attorneys’ fees and costs awarded by the Court to Class Counsel, will be the Settlement Funds. Subject to approval by the Court, eighty thousand dollars ($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 and Representative Plaintiff, such funds will be paid to a charitable organization(s) qualified under 501(c)(3) of the Internal Revenue Code as more fully set forth in the Settlement Agreement and Release. Subject to approval of the settlement by the Court, each member of the Settlement Class who does not request exclusion from the class as described below shall be entitled to an individual settlement amount. The maximum individual settlement amount for a Class Member who was residing in California during the class period is $5,000 and the maximum individual settlement amount for a Class Member who was residing in Florida, Maryland, Massachusetts, Nevada, New Hampshire, Pennsylvania, or Washington during the class period is $1,000. If there are insufficient Settlement Funds to pay all claimants the maximum amount, payments to the Class Members will be prorated by: (1) dividing the Settlement Funds less $80,000 by the sum of five times the number of authorized claimants from California plus the number of authorized claimants from states other than California (“Base Settlement Amount”), and (2) distributing five times the Base Settlement Amount to each Class Member who was residing in California during the class period, and distributing the Base Settlement Amount to each Class Member who was 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 action on the merits as to all Class Members who do not request to be excluded from the Settlement Class. All Class Members who submit claims, and all Class Members who do not validly and timely request to be excluded from the proposed settlement, shall be subject to a binding judgment in favor of the Defendant under res judicata. All such Class Members shall be forever barred from prosecuting their own lawsuits and shall be deemed to have released Defendant and its agents from all claims, causes of action or losses of any kind whatsoever relating to privacy rights or the recording of telephone calls which any Class Member has or may claim to have against such persons which are based upon, arising out of, or in any way relating to any of the acts, omissions or other conduct 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 proposed settlement. At the hearing, the Court will be available to hear any objections and arguments concerning the fairness of the proposed settlement. The hearing will take place before Judge Carolyn B. Kuhl in Department 323 of the Los Angeles Superior Court, Central Civil West Courthouse, located at 600 S. Commonwealth Ave., Los Angeles, California, 90005 (hereinafter, the “Court”). Page 2 of 4 WEST\21731307.1

HOW TO MAKE A CLAIM Subject to the approval of the settlement by the Court, if you want to participate in the settlement, you must complete and submit online the Claim Form that is available on the Internet at the following web address: www.GreenbergClassActionSettlement.com no later than September 25, 2009. If you choose to participate in the settlement by submitting a Claim Form, you will be bound by all of the provisions of the Settlement Agreement and Release, including a full release 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 the Settlement Class but wish to be excluded from the Settlement Class, postmarked no later than September 25, 2009, to the Claims Administrator at the following address, with copies sent to Class Counsel and Defendant’s Counsel: Claims Administrator: Greenberg Settlement Administrator PO Box 6659 Portland, OR 97228-6659 Class Counsel: Paul R. Kiesel, Esq. Kiesel, Boucher, & Larson LLP 8648 Wilshire Boulevard Beverly Hills, California 90211 Neville Johnson, Esq. Johnson & Johnson LLP, 439 North Canon Drive, Suite 200 Beverly Hills, California 90210 Defendant’s Counsel: Perrie M. Weiner, Esq. Edward T. Totino, Esq. DLA Piper LLP (US) 1999 Avenue of the Stars, Suite 400 Los Angeles, California 90067 A short statement of your reason for wanting to be excluded from the Settlement Class is also requested, but it is not required for your request to be valid. If you timely and validly request exclusion from the Settlement Class, you will be excluded from the Settlement 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 Page 3 of 4 WEST\21731307.1

of Intention to Appear with the Court, and serve such objection and/or notice upon Class Counsel and Defendant’s Counsel at the addresses set forth below. Any written objections and/or Notice of Intention to Appear must state, in clear and concise terms, the legal and factual arguments supporting the objection, and must include proof of membership in the Settlement Class. If your objection is rejected, you will be bound by the final judgment as if you had not objected. To be considered, the notice and objection papers must be received by the Court and delivered or postmarked to Class Counsel and Defendants’ Counsel no later than September 16, 2009. Settlement Class Members who do not timely make their objections in this manner will be deemed to have waived all objections and will not be entitled to be heard at the settlement approval hearing. You may, but need not, enter an appearance through counsel of your choice. If you do, you will be responsible for your personal attorney’s fees and costs. ADDITIONAL INFORMATION The full terms of the settlement we describe are in the Settlement Agreement and Release, and Amendment to Settlement Agreement and Release, on file with the Clerk of the Court. The Settlement Agreement and Release, as amended, shall govern where there is any conflict between it and this Notice. This description of the action is general and does not cover all of the issues and proceedings thus far. In order to see the complete file including the individual terms of the settlement, you should visit the office of the Clerk of the Court. The Clerk will inform you as to how to obtain the file relating to this lawsuit for inspection and copying at your own expense. THE FINAL APPROVAL HEARING The Settlement is subject to final Court approval and a hearing for that purpose has been scheduled for October 16, 2009 at 9:00 a.m. in Department 323 of the Superior Court of the State of California, for the County of Los Angeles, Central Civil West Courthouse, 600 S. Commonwealth Ave., Los Angeles, California, 90005 (“the Final Approval Hearing”). You are currently represented by Representative Plaintiff’s counsel, Paul R. Kiesel, Esq., Kiesel, Boucher, & Larson LLP, telephone (310) 854-4444; and Neville Johnson, Esq., Johnson & Johnson LLP, telephone (310) 975-1080 (“Class Counsel”), but may retain your own counsel, if you choose, at your own expense. At the Final Approval Hearing, Class Counsel will ask the Court to enter an Order finally approving the settlement and entering judgment. Class Counsel will also apply for an award of attorney’s fees not to exceed twenty-five percent (25%) of the Common Fund plus reimbursement of costs paid. YOU MAY CONTACT THE CLAIMS ADMINISTRATOR WITH ANY QUESTIONS AT 1-888-236-1260. YOU MAY REQUEST A COPY OF THE COMPLAINT, THE SETTLEMENT AGREEMENT AND RELEASE, OR ANY OTHER FILING IN THE LAWSUIT. YOU MAY ALSO VIEW THE FILES FOR THE CASE BY VISITING THE COURT CLERK’S OFFICE. PLEASE DO NOT CONTACT THE COURT OR DEFENSE COUNSEL WITH ANY QUESTIONS

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