E*Trade Financial Corp.'s largest shareholder urged the online brokerage to put itself up for sale and take other steps to boost shareholder value, causing its shares to surge 14 percent.
In a letter to E*Trade Chief Executive Steven Freiberg, the hedge fund firm Citadel LLC, run by Kenneth Griffin, called for a special shareholder meeting to decide whether the company should hire a new investment bank to advise on strategic alternatives, including a possible sale.
Citadel also asked New York-based E*Trade to remove two directors, Michael Parks and Donna Weaver, and install qualified independent directors to replace them.
E*Trade's board "is consistently unable to create value for shareholders," Citadel said.
Citadel, based in Chicago, said it has a 9.8 percent stake in E*Trade, and led a $2.5 billion cash infusion into the company in 2007.
An E*Trade spokeswoman declined to comment.
Shares of E*Trade were up $1.85 to $14.80 in early trading Wednesday on the Nasdaq.
© 2014 Thomson/Reuters. All rights reserved.