Shearson Lehman HuttonSee also: E.F. Hutton & Co.
In 1988, Shearson Lehman acquired E.F. Hutton & Co., a brokerage firm founded in 1904 by Edward Francis Hutton and his brother Franklyn Laws Hutton. Under the Hutton brothers and later Robert M. Fomon and the well-known Wall Street trader Gerald M. Loeb, E.F. Hutton became one of the largest brokerage firms in the U.S. Hutton was best known for its commercials in the 1970s and 1980s that used the phrase, "When E. F. Hutton talks, people listen."
In the 1980s Hutton was caught up in a number of difficulties that ultimately led the firm to seek a buyer. Hutton's most serious trouble came from a check kiting scandal that was uncovered in 1985. Hutton branches were writing checks against accounts at various regional banks and then funding those accounts with checks from yet other banks. This strategy, known as "chaining," gave Hutton the use of money in both accounts until the checks cleared. In effect, Hutton was giving itself a free loan that also did not carry any interest. Then, in early 1987, an internal Hutton probe revealed that brokers at an office in Providence, Rhode Island, laundered money for the Patriarca crime family. Although Hutton reported the investigation to the SEC, it was not enough to stop prosecutors from all but announcing that Hutton would be indicted. This last scandal was uncovered only a week before the 1987 stock market crash. By the end of November 1987, Hutton had lost $76 million, largely due to massive trading losses and margin calls that its customers could not meet.
On December 3, 1987, Hutton agreed to a merger with Shearson Lehman in a $1 billion ($2,020,796,719 today) deal. The merger took effect in 1988, and the merged firm was named Shearson Lehman Hutton, Inc.
Following the merger, dozens of Hutton brokers left the firm to join competitors. At the same time, the combined firm suffered dwindling business from individual investors as its focus was shifted to large corporate transactions. The Hutton brand was used until 1990, when American Express abandoned the name and the business was renamed Shearson Lehman Brothers. Joe Plumeri became the President & Managing Partner of Shearson Lehman Brothers in 1990.
In 1992, Shearson sold the Boston Company, an asset management group, to Mellon Financial. In December 1988, the Boston Company, had disclosed that it had overreported its earnings by $30 million.
Other articles related to "lehman":
... The firm was formerly known as Lehman Brothers Merchant Banking (LBMB), the buyout arm of Lehman Brothers ... partners as part of the bankruptcy of Lehman, the LBMB business was sold to its partners and a minority interest was acquired by Reinet Investments, a listed investment trust controlled ... The original Lehman group, which was based in New York City, was founded in 1986 and is currently investing from a $2.6 billion fund raised prior to the bankruptcy of Lehman ...
... Lehman's Hardware is a retail store located in Kidron, Ohio ... Lehman's also maintains a smaller, more traditional hardware store in Mount Hope, Ohio, where their Amish customers may shop with less interference from curious tourists ...
... Many Amish served by the Lehman stores are now vendors, building 40 to 50 of the products that Lehman's sells ... Lehman's ability to tap into the Amish tradition of craftsmanship came from its decades-long commitment to providing the Amish with the goods they needed to maintain ... In turn, now Amish craftsmen provide Lehman's with exclusive lines of products that would otherwise vanish ...
2011, the North Fork Creek, part of which runs beneath the Lehman's store, overflowed its banks, flash flooding the store ... Without flood insurance, Lehman's was left to absorb an estimated $100,000 in damage ... of the day and lasted less than three hours, Lehman's employees were advised to report to work dressed for cleanup ...
Famous quotes containing the words hutton and/or lehman:
“an age of unscrupulous and shameless book-making, it is a duty to give notice of the rubbish that cumbers the ground. There is no credit, no real power required for this task. It is the work of an intellectual scavenger, and far from being specially honourable.”
—Richard Holt Hutton (18261897)
“Roger Thornhill: Has life been like that?
Eve Kendall: Uhm mm.
Roger Thornhill: How come?
Eve Kendall: Men like you.
Roger Thornhill: Whats wrong with men like me?
Eve Kendall: They dont believe in marriage.
Roger Thornhill: Ive been married twice.
Eve Kendall: See what I mean?”
—Ernest Lehman (b.1920)