E*Trade Investor Rides to the Rescue

Updated from Tuesday, June 9

Ken Griffin is bucking his tendency to duck the limelight to take a more active role in shoring up Citadel Investments' floundering investment in E*Trade Financial (ETFC Quote).

Griffin, whose hedge fund is E*Trade's largest shareholder, is taking a seat on E*Trade's board of directors, according to press release from the online brokerage. Griffin will serve as a member of E*Trade's finance and risk oversight committee

The move is significant because the typically media-shy Griffin does not currently serve on any public company board of directors, according to Citadel's Web site. Griffin, 40, is the director of the Chicago Public Education Fund. He is also a member of the boards of Trustees for the Art Institute of Chicago and the Museum of Contemporary Art.

"E*Trade is among the most recognized and innovative brands in America," Griffin said in a statement. "I look forward to working with the members of E*Trade's board to help create and take advantage of the many market opportunities that these unique times provide."

E*Trade CEO Don Layton said that Griffin's "perspective of the capital markets and on managing a sophisticated investment business will complement the wide range of expertise" among the company's board members, according to the release.

It will be particularly interesting to see how Griffin's presence on E*Trade's board affects how the troubled company addresses its capital issues. Citadel is E*Trade's largest debt and stockholder.

E*Trade said Griffin's appointment came after Citadel "exercised its right under the 2007 Citadel Investment Agreement to appoint" a director to the board.