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E*TRADE vs. Lindsay Lohan

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There's apparently a new way to get rich through E*TRADE (Nasdaq: ETFC  ) : You simply sue the discount broker for $100 million.

Believe it or not, that's exactly what Lindsay Lohan is doing. Her camp believes that E*TRADE modeled a character in one of its E*TRADE Baby televised spots after her.

Let's go back to last month's Super Bowl, when E*TRADE introduced a spot in which the company's chatty spokestoddler is having a webcam chat with his girlfriend. He explains that he didn't call her the night before because he was diversifying his portfolio on E*TRADE. She's skeptical.

"And that milkaholic Lindsay wasn't over?" she asks.


That's when Lindsay pops into the screen at the E*TRADE Baby's house and says, "Milk-a-what?"

According to Lohan, one of countless Lindsays on the planet, the baby milkaholic is modeled after her.

It's a pretty ridiculous claim, but if the woman who sued McDonald's (NYSE: MCD  ) after spilling hot coffee on herself emerged victorious several years ago, I'm not going to rule out Lohan's chances of a legal victory.

The only similarity between Lohan and the E*TRADE character seems to be that they're both babies with limited screen time. But even if Lohan loses this fight, both she and E*TRADE will get what they want. Lohan will be in the news again, and E*TRADE may connect with mainstream audiences on tabloids and

The discount-brokerage industry can use the infusion, too, after starting out the year on a sour note. Rivals Charles Schwab (Nasdaq: SCHW  ) and TD AMERITRADE (Nasdaq: AMTD  ) missed Wall Street's targets in their latest quarter, and E*TRADE cranked out yet another deficit.

The industry's fortunes brightened last month, when Schwab, TD AMERITRADE, E*TRADE, and Interactive Brokers (Nasdaq: IBKR  ) posted 21% to 24% spikes in daily average revenue trades in January relative to December. The improvement prompted Goldman Sachs to upgrade Schwab -- just two months after lowering its price target on the three leading discounters -- as well as optionsXpress Holdings (Nasdaq: OXPS  ) and TradeStation (Nasdaq: TRAD  ) .

So let's give Lohan some credit for going after E*TRADE, now that the industry's prospects are improving. The "Lindsay" accusations seem frivolous to me, but I'm guessing that both Lohan and E*TRADE will milk this one nicely.


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Charles Schwab, Interactive Brokers, and optionsXpress are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz has been trading exclusively through discount brokers since 1990, but he owns no shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (16) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 10, 2010, at 11:15 AM, asskikin wrote:

    I am continually amazed how the media in America failed to bother to learn the facts about the 'spilled coffee' lawsuit McDonalds was sued over.

    The author of this column is another lazy author who clearly knows nothing about the case.

    The woman deserved EVERY penny she received.

  • Report this Comment On March 10, 2010, at 11:47 AM, Robear1020 wrote:

    I’ve heard that spot several times since Lohen tried to change her image from an alcoholic to a milk-oholic and I’ve got to say I never once associated Lindsay with the Lindsey mentioned in the commercial (listen again, they didn’t say Lindsay). Last month there was only one Lindsey that the American public was thinking about and that was Lindsey Vonn. Lindsey appeared in both the SI swimsuit issue and went on to win three medals during the 2010 Winter Olympics. I suspect that Lindsey isn’t about to sue E*Trade for defamation of character because it’s a well known catch phrase that “milk helps the body grow” and Lindsey may have the opportunity to star in a milk commercial. Clearly Lindsay is barking up a tree full of reporters and it’s already brought her a $100 million in free publicity.

  • Report this Comment On March 10, 2010, at 12:39 PM, mjhuds1 wrote:

    Asskikin: You must be a lawyer....another LAZY lawyer who depends on unfounded litigation to scrap up a living rather than spending time to find justified cases. The fact is it was a frivolous lawsuit...that's why the British threw the exact same suit out into the garbage. Nowhere does McDonald's advise you to consume it's product in your just sells it to you while you're in it. And they certainly don't say "open up a hot coffee in your lap, particularly if you have fumbly 70 year-old fingers."

    I like this article...yours truly, a LAZY doctor who hates when his patients don't take responsibility for their opening a coffee cup in their crotch. Cheers. Keep kikinass I guess...or whatever you do.

  • Report this Comment On March 10, 2010, at 1:19 PM, alexxlea wrote:

    I'm going to weigh in here and agree with kikin that you should not have used the McDonald's lawsuit as an example of "similar" "frivolous" lawsuits, as the lawsuit was not, in this user's opinion, one that should have been tossed.

    Etrade is, however, what I consider to be one of the absolute trashier brokers around. Not that that makes the lawsuit you're actually talking about any more valid.

  • Report this Comment On March 10, 2010, at 1:20 PM, XMFTom7 wrote:

    The one maxim any advertising guru will tell you: nothing, and I mean *nothing* in advertising is ever accidental. I have little doubt that the ad team who came up with this knew that a connection would be made twixt Lohan and the milk-a-holic baby of the same name, whether that was their intention or not.

    Whatever. Personally, I think her suit is weak at best and should get thrown out, if only on the fact that E*TRADE could argue that even if they were lampooning her, she's a public celebrity with a well-established "bad reputation" in the media. But that doesn't mean she won't win -- and the upside of her win might be the demise of the E*TRADE baby campaign, which I would welcome with open arms and gallons of milk. Most annoying commercials ever since Wendy's "Where's the beef?" ads.

  • Report this Comment On March 10, 2010, at 1:43 PM, CMFStan8331 wrote:

    You know, given the totally clueless nature of "baby" Lindsay as depicted in the commercial, Ms. Lohan might just have a case...

  • Report this Comment On March 10, 2010, at 1:46 PM, TMFKris wrote:

    I think Lohan may be overrating herself as someone known by first name. Seriously, who saw the ad and thought "Awesome, what a clever dig at Lindsay Lohan"? I don't think her reputation could be sullied by being likened to a baby who says one word, even though that baby may have been messing with some other baby's boyfriend? (Can you say, yuck.) Unless Lohan has used the word "milkaholic" to describe herself, which would be silly. The young lady needs better managers and publicists. Because I doubt the lawsuit was solely Lindsay's idea.

    Kris (TMF copyeditor)

  • Report this Comment On March 10, 2010, at 1:54 PM, ZEEMOTLEEFEWL wrote:

    Ms. Liebeck had 3rd degree burns on 6% of her body from the coffee.

    McDonalds has had numerous complaints and lawsuits over the years regarding their coffee temperature (176F-194F is the current recomended range for McDeez).

  • Report this Comment On March 10, 2010, at 1:58 PM, catoismymotor wrote:

    The only reason this is a big deal is Coutney Love laughingly pointed out the comparison on night while the two were partying.

  • Report this Comment On March 10, 2010, at 2:19 PM, TMFLomax wrote:

    I seriously don't get this. How could Team Lindsay even prove such a thing? And when I saw the commercial the "Lindsay Lohan" thought didn't cross my mind, whether that was the intention or not. (Did I dream it, or did one article say that Lindsay's attorney said it was "subliminal"? Oh man.) Completely ridiculous and such a waste of the courts' and everybody else's time.

  • Report this Comment On March 10, 2010, at 2:55 PM, MaxTheTerrible wrote:

    To start some conspiracy theories brewing, I think that E-Trade may have paid Lohan to sue them. Think about it, it's a WIN-WIN for everyone! Lohan get the publicity she so desperately seeking and E-Trade looks good in the eyes of potential customers...

  • Report this Comment On March 10, 2010, at 3:35 PM, TMFMitten wrote:

    Who's Lindsay Lohan?


  • Report this Comment On March 10, 2010, at 3:42 PM, catoismymotor wrote:

    This kind of crap is why we need a loser pays system.

  • Report this Comment On March 10, 2010, at 4:01 PM, zymok wrote:

    When I hear "Lindsay" I think of CSI:NY. When I hear "Lilo" I think of "Lilo and Stitch." I think Ms. Lohan should get a new publicist rather than engage in frivolous lawsuits.

  • Report this Comment On March 10, 2010, at 4:05 PM, offroadhero wrote:

    I have no ideal who she is. She doesn't seem to be effecting the stock price. I try to aviod that E-Trade baby, it scares me. Lastly, McDonald's will forever be associated by stupit law suit even if they aren't all that stupid.

  • Report this Comment On March 10, 2010, at 10:25 PM, bluemoon61 wrote:

    Did they sell her Auction Rate Securities too in late 2007? if so she has a case.

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