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| ] FINANCIAL LITIGATION. Amidst a highly contested auction where bidders included Charles Schwab and Ameritrade, Mr. Amanat ultimately sold his highly sought after company, Tradescape, which was considered one of the "Top 50 Private Companies in the United States" in 2001 by a national magazine, to E*Trade on April 9th 2002 for $280 million in E*TRADE stock becoming E*TRADE's largest shareholder. Three weeks later, on May 1st 2002, the Wall Street Journal announced that the CEO of ETRADE, Cristos Cotsakos, stole $90 million from the company without disclosing it to investors including Tradescape a la Refco. The stock soon plummeted 70% from its high after ETRADE admitted that their 2001 financials were materially innaccurate. | ] FINANCIAL LITIGATION. Amidst a highly contested auction where bidders included Charles Schwab and Ameritrade, Mr. Amanat ultimately sold his highly sought after company, Tradescape, which was considered one of the "Top 50 Private Companies in the United States" in 2001 by a national magazine, to E*Trade on April 9th 2002 for $280 million in E*TRADE stock becoming E*TRADE's largest shareholder. Three weeks later, on May 1st 2002, the Wall Street Journal announced that the CEO of ETRADE, Cristos Cotsakos, stole $90 million from the company without disclosing it to investors including Tradescape a la Refco. The stock soon plummeted 70% from its high after ETRADE admitted that their 2001 financials were materially innaccurate. | ||
| Mr Amanat threatened to sue E*TRADE for federal securities fraud for not disclosing this securities fraud before merging with Tradescape. Sensing that the stock would not rise again unless the CEO resigned Mr Amanat demanded the resignation of E*TRADE's CEO and tried to enlist the support of several mutual fund shareholders of E*TRADE in order to pressure ETRADE to make its CEO resign. E*TRADE threatened to smear Mr. Amanat unless he agreed to not sue and to make allegations against him that they knew they "could not make subject to Rule 11 (in good faith)" and lead a "coalition of the willing" to put |
Mr Amanat threatened to sue E*TRADE for federal securities fraud for not disclosing this securities fraud before merging with Tradescape. Sensing that the stock would not rise again unless the CEO resigned Mr Amanat demanded the resignation of E*TRADE's CEO and tried to enlist the support of several mutual fund shareholders of E*TRADE in order to pressure ETRADE to make its CEO resign. E*TRADE threatened to smear Mr. Amanat unless he agreed to not sue and to make allegations against him that they knew they "could not make subject to Rule 11 (in good faith)" and lead a "coalition of the willing" to put him and his company into bankrutpcy. They also threatened to work with regulators and make allegations against him leading to charges being filed against his brother Irfan Amanat which ultimately were dismissed by an SEC judge yesterday. | ||
| Ultimately, Mr Amanat sued E*TRADE for $1.5 billion. Around the time of the filing of this lawsuit three ETRADE executives Tanzman, Rock, and Kaban (whom ETRADE paid $11.6 million) filed an involuntary bankruptcy petition against Mr Amanat's company in a bid to prevent the lawsuit from being successful. E*TRADE prevented Mr. Amanat from being able to obtain any money or sell any portion of 34 million shares of E*TRADE stock Mr Amanat was entititled to. They also helped to shut down another business that Mr Amanat owned and operated at the time, an ECN called MarketXT Inc which was the second largest ECN at the time of its shutdown trading 10% of NASDAQ's volume -larger than Archipeligo at that time, which recently acquired the NYSE and was generating over $100 million in revenues at that time. Legal Experts predict that Amanat will win the lawsuit. His efforts already led to the resignation in disgrace of ETRADE's former CEO Christos Cotsakos. After the resignation ETRADE's stock price, as Amanat had predicted, surged 400% to a recent $21 per share delighting shareholders and making his own 34 million shares worth a cool $700 million. | Ultimately, Mr Amanat sued E*TRADE for $1.5 billion. Around the time of the filing of this lawsuit three ETRADE executives Tanzman, Rock, and Kaban (whom ETRADE paid $11.6 million) filed an involuntary bankruptcy petition against Mr Amanat's company in a bid to prevent the lawsuit from being successful. E*TRADE prevented Mr. Amanat from being able to obtain any money or sell any portion of 34 million shares of E*TRADE stock Mr Amanat was entititled to. They also helped to shut down another business that Mr Amanat owned and operated at the time, an ECN called MarketXT Inc which was the second largest ECN at the time of its shutdown trading 10% of NASDAQ's volume -larger than Archipeligo at that time, which recently acquired the NYSE and was generating over $100 million in revenues at that time. Legal Experts predict that Amanat will win the lawsuit. His efforts already led to the resignation in disgrace of ETRADE's former CEO Christos Cotsakos. After the resignation ETRADE's stock price, as Amanat had predicted, surged 400% to a recent $21 per share delighting shareholders and making his own 34 million shares worth a cool $700 million. | ||
Revision as of 13:42, 23 December 2005
Business History
Mr. Omar S. Amanat most recently was the Founder, CEO and majority shareholder of Tradescape Corp, a next generation brokerage and technology firm for professional investors, which he founded in 1997 and sold to E*Trade Financial in 2002 becoming one of E*Trade's largest shareholders. Prior to forming Tradescape, Mr. Amanat co-founded CyberBlock, the predecessor of CyberTrader, Inc., which was acquired by Charles Schwab in February 2000. Mr. Amanat is the recipient of the prestigious Albert P. Einstein Technology award for outstanding corporate citizenship and sits on the Board of Trustees for the Harlem Youth Development Foundation. He has been profiled in various media venues including Fortune Magazine, The Wall Street Journal and The New York Times, and is a frequent public speaker. Mr. Amanat attended the University of Pennsylvania and the top-ranked Wharton School of Business and he currently sits on the Board of Advisors for Wharton's Entrepreneurial Council.
E*Trade Lawsuit
E*Trade FINANCIAL LITIGATION. Amidst a highly contested auction where bidders included Charles Schwab and Ameritrade, Mr. Amanat ultimately sold his highly sought after company, Tradescape, which was considered one of the "Top 50 Private Companies in the United States" in 2001 by a national magazine, to E*Trade on April 9th 2002 for $280 million in E*TRADE stock becoming E*TRADE's largest shareholder. Three weeks later, on May 1st 2002, the Wall Street Journal announced that the CEO of ETRADE, Cristos Cotsakos, stole $90 million from the company without disclosing it to investors including Tradescape a la Refco. The stock soon plummeted 70% from its high after ETRADE admitted that their 2001 financials were materially innaccurate.
Mr Amanat threatened to sue E*TRADE for federal securities fraud for not disclosing this securities fraud before merging with Tradescape. Sensing that the stock would not rise again unless the CEO resigned Mr Amanat demanded the resignation of E*TRADE's CEO and tried to enlist the support of several mutual fund shareholders of E*TRADE in order to pressure ETRADE to make its CEO resign. E*TRADE threatened to smear Mr. Amanat unless he agreed to not sue and to make allegations against him that they knew they "could not make subject to Rule 11 (in good faith)" and lead a "coalition of the willing" to put him and his company into bankrutpcy. They also threatened to work with regulators and make allegations against him leading to charges being filed against his brother Irfan Amanat which ultimately were dismissed by an SEC judge yesterday. Ultimately, Mr Amanat sued E*TRADE for $1.5 billion. Around the time of the filing of this lawsuit three ETRADE executives Tanzman, Rock, and Kaban (whom ETRADE paid $11.6 million) filed an involuntary bankruptcy petition against Mr Amanat's company in a bid to prevent the lawsuit from being successful. E*TRADE prevented Mr. Amanat from being able to obtain any money or sell any portion of 34 million shares of E*TRADE stock Mr Amanat was entititled to. They also helped to shut down another business that Mr Amanat owned and operated at the time, an ECN called MarketXT Inc which was the second largest ECN at the time of its shutdown trading 10% of NASDAQ's volume -larger than Archipeligo at that time, which recently acquired the NYSE and was generating over $100 million in revenues at that time. Legal Experts predict that Amanat will win the lawsuit. His efforts already led to the resignation in disgrace of ETRADE's former CEO Christos Cotsakos. After the resignation ETRADE's stock price, as Amanat had predicted, surged 400% to a recent $21 per share delighting shareholders and making his own 34 million shares worth a cool $700 million.