03/28/2008 02:45 am ET Updated May 25, 2011

E*Trade CEO Denies Bankruptcy, Risks Jail Time

E*Trade CEO Mitch Caplan took an admirable and risky step yesterday: He went on CNBC and categorically ruled out bankruptcy. He acknowledged E*Trade's problems, and, unlike most CEOs, admitted that he was bearish about the next 12-18 months. (He also played the wimpy "irresponsible" card again, lambasting the analyst who used the dreaded "b" word, but never mind).

Why was Caplan's CNBC appearance admirable? Because E*Trade needed to take a forceful, public stand. Why was it risky? Because if, god forbid, the crisis worsens and E*Trade does go bankrupt, Caplan will probably go to jail...

E*Trade's situation reveals the enormous challenge that executives at distressed companies face in these post Enron days. Even as pundits rage that "nothing has changed," that corporate behavior is as sleazy as ever, senior executives have been muzzled to the point where management-market communications are suffering and investors are actually getting hurt.

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