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Name and title: Russell S. Elmer, general counsel and corporate secretary Age: 41 The company: E*Trade Financial Corp. provides diversified financial services to retail, corporate and institutional customers. Investing, banking, lending, securities brokerage products, financial planning and advice are offered to its 3.5 million account holders. The firm also administers employee stock plans. Transactions are performed mostly over the Internet or via telephone. ETrade’s focus is primarily on North America, but it now is tapping the international market. Elmer operates out of the Arlington, Va., office of New York-based ETrade, which was founded in 1982 and went public in 1996. It has an estimated 3,000 employees, and “is on track for roughly $1.6 billion in revenues” for the current year. And other changes: “I have seen the company through a lot of really interesting changes,” said Elmer. ETrade was originally a “monoline” firm, primarily structured as a technology company that happened to offer financial services. As it grew, it morphed into a diversified financial services company fueled by its technology. The transformation has resulted in “a whole regime” of rules and regulations, according to Elmer. For example, a slew of privacy laws were devised so that customer data could be maintained separately but also could be integrated into various products as needed. ETrade programs with a “legal and regulatory framework” include the ETrade Complete Account; a new program in which broker/dealer fees are rebated in certain mutual funds transactions; and a mortgage in which a customer can lock in a loan interest rate. The destruction of the World Trade Center on Sept. 11, 2001, spurred changes for ETrade and Elmer’s team. Extra attention is now focused on disaster recovery and business continuity. Preparations have been made to anticipate potential market shutdowns, a point brought home with the July London bombings. Backup plans are now in place throughout the firm. The USA Patriot Act affected Elmer’s job, as well. Anti-money laundering procedures and statutes, he said, now are much tighter, and security has been “upgraded and beefed up.” Generalist GC: “No two days are alike” for Elmer, whose job is “peppered with the topical issues of the day.” He supervises all of the firm’s legal affairs, manages its regulatory and compliance functions and deals with senior management and the board of directors in formulating and advancing strategic initiatives. He oversees all committees of the board and has close involvement with the internal audit group. Elmer works with the company’s lobbyists, and deals with foreign laws and issues “more than I would have thought.” He revisits the company code of conduct annually and runs the firm’s anonymous whistleblower program. ETrade is part of a consolidating industry, and Elmer has participated in two major acquisitions in the last two months, as well as several potential ones. Discount broker Harrisdirect LLC had an October closing and BrownCo, a low-cost brokerage service, has signed a definitive agreement. Elmer has also been involved in “a lot of financing activities.” He keeps a watchful eye on litigation, and his firm has reached a “near resolution” of a case against now-liquidated MJK Clearing Inc. Some $64 million is at issue in the stock-lending situation that “ultimately became unwound,” and which has languished for four years in international and domestic bankruptcy courts. Regulatory oversight: Regulators are “many and varied” for ETrade’s business activities. Domestically, compliance must be achieved with the National Association of Securities Dealers, the New York Stock Exchange and the Office of Thrift Supervision standards. The firm also must satisfy the investment management area of the Securities and Exchange Commission. International staff members deal directly with regulatory officials in the United Kingdom, Hong Kong and the Scandinavian countries. Elmer “absolutely” has Sarbanes-Oxley responsibilities, although these are dwindling as the duties become part of the ongoing corporate infrastructure. Legal team and outside counsel: Elmer manages a worldwide team of approximately 40, consisting of 20 attorneys along with support staff and paralegals. Three-quarters of the legal work is done in-house. Outsourced categories include mergers and acquisitions, general corporate securities matters and specialized regulatory work. Elmer hires the firms that advise the board of directors, and four of his team members sign on attorneys for specialty areas: John Buchman (general counsel of ETrade Bank), Laura Singer (general counsel of ETrade Securities), Connie Tirabosco (international GC) and Ralph Blascovich, who runs litigation. Outside firms are New York’s Davis Polk & Wardwell, primarily for corporate counsel; and Clifford Chance, for ETrade’s acquisitions of broker/dealers. Elmer reports to director and Chief Executive Officer Mitchell H. Caplan. Route to the top: Elmer joined ETrade in July 2000 as assistant general counsel, and served as chief of legal affairs and as a human resources officer before attaining his present job in 2001. From 1990 to 2000, he was a partner at Gray Cary Ware & Freidenrich (now DLA Piper Rudnick Gray Cary), focusing on litigation and employment-related matters. Elmer achieved a juris doctor from University of California, Berkeley School of Law in 1990. Personal: Elmer, who is single, was born in Denver. His hobbies are “traveling and eating.” The GC is proud of the way his organization has “grown up,” and is pleased to have participated in establishing ETrade’s infrastructure as it progressed from a dot-com outfit to a “more mature company.” He pointed out that “sometimes the things that are not so sexy” are actually the elements that establish a long-term franchise. Last book and movie: Geronimo: My Life, by Geronimo and S.M. Barrett, and Wallace & Gromit: The Curse of the Were-Rabbit. - Roger Adler

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