According to The Wall Street Journal “E*Trade Financial (NASDAQ:ETFC) which is ensnared in the mortgage crisis, is getting a $2.55 billion cash infusion from Citadel Investment Group.”

Citadel will “purchase of E*Trade’s entire $3 billion portfolio of asset-backed securities for a value of around $800 million.” The balance of the money will go in as 10-year notes with a 12.5% interest rate. Citadel will end up owning 20% of the company and have a seat on the board.

Douglas A. McIntyre is an editor at 247wallst.com.

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