NEW YORK, Sept 9 (Reuters) - E*Trade Financial Corp Chairman and Chief Executive Donald Layton is stepping down by year-end, the troubled online broker said on Wednesday, adding that it hopes to name a successor before that time.
A spokeswoman said Layton made the decision, and the company said Layton will have delivered on his commitment to restructure E*Trade.
But his 18-month tenure as CEO has been marked by a crisis in E*Trade's mortgage business, and the company has reported eight straight quarterly losses as delinquencies and charge-offs have mounted.
Layton, formerly of JPMorgan Chase & Co, will retain all current responsibilities until the end of 2009.
E*Trade shares were unchanged at $1.65 in early Nasdaq trading.
The shares are off 94 percent since June 2007, when the mortgage market crisis began to weigh. But they are up 40 percent since July, boosted by a successful $586 million stock offer and $1.76 billion debt swap, needed to strengthen the company's balance sheet amid regulatory pressure.

Citadel Investment Group, E*Trade's biggest shareholder, has become increasingly vital to the online broker's survival. In June, Citadel CEO Kenneth Griffin joined E*Trade's board in a move suggesting it wants a stronger hand in steering the broker, whose core trading business and popular brand have remained sound.
The giant hedge fund played a big role in the stock sale and debt swap, and holds $850 million in straight E*Trade debt and 1.16 billion E*Trade shares. Late last month, it reversed an earlier stance, deciding not to cut its stake in the broker.
Layton, 59, was named chairman of the board in November 2007, and named chief executive in March 2008. The company said in January 2008, it expected to turn a profit by the end of that year.

Robert Druskin, E*Trade's lead independent director, said in a statement on Wednesday that the company is now "poised to take advantage of new growth opportunities, particularly in its online brokerage business."
Layton's most recent position at JPMorgan was vice chairman.

(Reporting by Jonathan Spicer, editing by Gerald E. McCormick) Keywords: ETRADE/CEO (jonathan.spicer@thomsonreuters.com; +1-646-223-6253; Reuters Messaging: jonathan.spicer.reuters.com@reuters.net)

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