Wit and E*Trade to Swap Some Struggling Ventures

Sometimes two wrongs can make a right.

The plan from E*Trade (EGRP Quote) and Wit Capital (WITC Quote) to play switcheroo with their investment banking and brokerage businesses should leave both companies better off.

E*Offering, the West Coast investment bank in which E*Trade holds a 28% stake, will be merged into Wit Soundview, the investment-banking unit of Wit. Wit puts 32 million shares, or $356 million, into the new venture. E*Trade will buy 2 million Wit shares and, in return, get Wit's tiny retail-brokerage business. ...