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Online investment bank set
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January 12, 1999: 9:14 a.m. ET
E*Trade-backed venture seeks to give online traders more IPO access
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NEW YORK (CNNfn) - E*Trade Group, the online trading service operator, says it is part of a group establishing a full-service Internet investment bank that will underwrite initial public offerings and make them more available to online traders.
The Palo Alto, Calif.-based company says it will own 28 percent of E*Offering, but has an option to increase its stake to 51 percent. Others involved in the venture include former Robertson Stephens & Co. chairman Sandy Robertson and former Cruttenden Roth president Walter Cruttenden III, who will serve as president .
E*Trade says E*Commerce will offer individual investors who are E*Trade customers greater access to subscribe to public offerings. It also says the investment bank will reduce the corporate fees associated with the underwriting process.
E*Commerce expects to begin underwriting public offerings of about $25 million-$50 million later this year. E*Trade says the investment bank will conduct traditional IPO activities such as road shows, share distribution and research dissemination over the Internet.
It also says E*Commerce will distribute up to half of every IPO to online retail customers, with E*Trade account holders getting first access in most cases.
"E*Offering is another step in our journey toward democratization of the financial services markets," says E*Trade chairman-elect Christos Cotsakos, who will serve on the E*Commerce board. "It means more access to the public financial markets for individuals and a far more cost-effective service model for emerging companies that now can have better control over their most important asset -- their company's shares."
Eventually, E*Commerce hopes to offer such services as private placement, convertible debt and straight debt underwriting.
E*Trade Group shares closed Monday at 88-1/2, up 20-7/8, after the company reported a 63 percent increase in revenue for the fiscal first quarter. 
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E*Trade
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