E* TRADE FINANCIAL CORPORATION, as Issuer and THE BANK OF NEW YORK, as Trustee FIRST SUPPLEMENTAL INDENTURE Dated as of December 27, 2007

Exhibit 4.12

E* TRADE FINANCIAL CORPORATION,

as Issuer

and

THE BANK OF NEW YORK,

as Trustee

FIRST SUPPLEMENTAL INDENTURE

Dated as of December 27, 2007

12.5% Springing Lien Notes Due 2017

FIRST SUPPLEMENTAL INDENTURE, dated as of December 27, 2007 (the “Supplemental Indenture”) to the Indenture dated as of November 29, 2007 (the “Base Indenture,” and as supplemented by this Supplemental Indenture, the “Indenture”), between E*TRADE FINANCIAL CORPORATION (the “Company”), a Delaware corporation, and THE BANK OF NEW YORK, a New York banking corporation, as trustee (the “Trustee”).

WHEREAS, the Company has duly authorized the execution and delivery of the Base Indenture and up to $1,936,000,000 (plus any Capitalized Interest) aggregate principal amount of the Company’s 12.5% Springing Lien Notes due 2017 (the “Notes”);

WHEREAS, the Company desires and has requested the Trustee to join it in the execution and delivery of this Supplemental Indenture in order to correct a defect in the Base Indenture and the Notes issued thereunder, including all Notes issued prior to the date hereof and any Notes issued on or after the date hereof;

WHEREAS, Section 9.01(a) of the Base Indenture provides that a supplemental indenture may be entered into without the consent of the holders of any Notes by the Company and the Trustee to cure any ambiguity, defect or inconsistency in the Indenture or the Notes, provided certain conditions are met;

WHEREAS, the conditions set forth in the Indenture for the execution and delivery of this Supplemental Indenture have been complied with; and

WHEREAS, all things necessary to make this Supplemental Indenture a valid agreement of the Company and the Trustee, in accordance with its terms, and a valid amendment of, and supplement to, the Base Indenture have been done;

NOW, THEREFORE:

The Company agrees with the Trustee, for the equal and ratable benefit of the holders of the Notes, that the Base Indenture and all Notes issued prior to the date hereof and any Notes issued on or after the date hereof are supplemented and amended, to the extent expressed herein, as follows:

ARTICLE 1

SCOPE OF SUPPLEMENTAL INDENTURE; GENERAL

Section 1.01. Scope Of Supplemental Indenture; General. This Supplemental Indenture supplements the provisions of the Base Indenture, to which provisions specific reference is hereby made, and all Notes issued or to be issued under the Base Indenture. Capitalized terms used but not defined herein have the meanings ascribed to such terms in the Base Indenture.

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ARTICLE 2

CORRECTIVE AMENDMENTS

Section 2.01. Exhibit A of the Base Indenture and all Notes issued prior to the date hereof and any Notes issued on or after the date hereof are hereby amended to include the following legend is hereby amended to include the following legend:

THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER. FOR INFORMATION REGARDING THE AMOUNT OF OID, THE ISSUE DATE, AND THE YIELD TO MATURITY OF THE NOTE, PLEASE CONTACT: SENIOR VICE PRESIDENT, CORPORATE TAX, E*TRADE FINANCIAL CORPORATION AT BALLSTON TOWER, 000 XXXXX XXXXX XXXX, 00XX XXXXX, XXXXXXXXX, XX 00000.

The Trustee is directed to affix such legend on all Notes heretofore issued.

ARTICLE 3

MISCELLANEOUS

Section 3.01. Governing Law. This Supplemental Indenture shall be governed by and construed in accordance with the internal laws of the State of New York.

Section 3.02. Counterparts. This Supplemental Indenture may be signed in various counterparts which together shall constitute one and the same instrument.

Section 3.03. Trustee Not Responsible For Recitals. The recitals contained herein shall be taken as the statements of the Company and the Trustee assumes no responsibility for their correctness. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture except that the Trustee represents that it is duly authorized to execute and deliver this Supplemental Indenture and perform its obligations hereunder.

Section 3.04. This Supplemental Indenture is an amendment supplemental to the Indenture and said Indenture and this Supplemental Indenture shall henceforth be read together.

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first written above.

E*TRADE FINANCIAL CORPORATION
By:		/s/ Xxxxxx X. Xxxxxx
		Name:		R. Xxxxxxx Xxxxxx
		Title:		President & COO

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THE BANK OF NEW YORK, as Trustee
By:		/s/ Xxxxxx X. Xxxxxxx
		Name:		Xxxxxx X. Xxxxxxx
		Title:		Vice President

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