ETrade Financial Corp. has been accused of monitoring and recording customers' telephone calls in California without informing them or seeking their consent.
The online stock brokerage violated customers' privacy rights by not disclosing that their calls were recorded, according to a complaint filed Wednesday in Los Angeles County Superior Court. The lawsuit, which seeks to represent ETrade customers who called the New York-based company's California offices, seeks unspecified damages.
ETrade declined to comment. Its shares fell 20 cents Friday to $22.86.
California law prohibits businesses from recording telephone conversations without the caller's knowledge. In July, in a case brought against Citigroup Inc.'s Salomon Smith Barney, the California Supreme Court ruled that it was illegal for callers from outside California to secretly record telephone calls, even if it wasn't illegal in the state where the call originated.