E*Trade Gets Hammered

Updated from Nov. 9

E*Trade (ETFC Quote) slumped early Monday after the company said it expected added writedowns and disclosed a probe by the Securities and Exchange Commission.

Shares of the online broker were plunging 29% to $6.12 in premarket trading.

The company said late Friday that it has seen continued declines in the fair value of its $3 billion asset-backed securities portfolio, predominantly within ABS collateralized debt obligations and second-lien securities. The total exposure to those instruments as of Sept. 30 was approximately $450 million, including about $50 million of AAA-rated asset-backed CDOs that were downgraded to below investment grade. ...