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) --

E*Trade Financial


late Thursday put an end to speculation that its strategic review would yield a company sale.

Rejecting pressure from its largest shareholder


to sell itself to an online broker competitor such as

TD Ameritrade



Charles Schwab


, E*Trade chief executive and interim chairman Steven Freiberg said, "Following this review by our Board, the management team will continue to execute on our strategy designed to create value for both our stockholders and our customers."

E*Trade shares fell more than 5% in after-hours trading to $8.96. The pioneer in online retail investing of stocks and bonds, with $182 billion in customer assets worldwide, has seen its stock fall more than 40% year to date.

Earlier in the year, Griffin asked E*Trade to consider options such as a company sale, and the company capitulated, hiring

Goldman Sachs


as an adviser on strategic alternatives. After two days of scheduled board meetings this week, the company ended its review without a sale proposal -- halting Citadel's more than three-month activist push. In July, Citadel wrote in a letter to E*Trade's management, "Since November of 2007, the board has continually failed to act in the best interest of E*Trade shareholders."

Chicago-based hedge fund Citadel, run by Ken Griffin who founded the fund using investment gains he made trading commodities from a Harvard dorm room, became one of E*Trade 's largest investors after investing $2.5 billion in the company in 2007 to help it avert a bankruptcy.

Since this time in 2006, the company's shares are down nearly 96%. The online broker was founded in 1992 and went public in 1996.

In 2011, E*Trade has returned to profitability, earning roughly $162 million in the first three quarters of the year after losing $28 million in 2010. In 2009, the company lost $1.3 billion, only exceeded by its $1.4 billion 2007 loss as roiling markets soured trading volumes, customer accounts and a misplaced push into morgtages.

Other large E*Trade shareholders are







T Rowe Price

and hedge fund

Omega Advisors

run by Leon Cooperman, all with over 3% holdings in the New York-based company's shares. Cooperman, at October's Value Investing Congress, said that TD Ameritrade was E*Trade's

most likely buyer.

For Citadel, the rejection is a blow to its 9.6% stake in E*Trade, the fund's second biggest holding overall to a $316 million investment in



. Griffin's Citadel, during the time it's battled with E*Trade, has lost other wars. In August, the company scrapped a plan to become a full service investment bank and initiated layoffs.

-- Written by Antoine Gara in New York