Word: hutton
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...long ago, E.F. Hutton could boast that it was the brokerage house to which "people listen." But in the past two years Hutton has found its reputation dwindling rapidly. Amid concerns over the firm's uncertain financial health, Hutton's stock slumped from a high of 44 7/8 last January to as low as 11 on the day after the October market crash. Last week the eroding confidence in the company and an expected downgrading of its credit rating forced the parent company of the tenth largest U.S. retail brokerage to take a - humbling step: inviting a takeover or dismemberment...
...Hutton was founded by Edward F. Hutton, a stockbroker who later became chairman of General Foods. The brokerage thrived on the strength of its retail branch offices (total brokers: 6,500) and avoided being taken over during Wall Street's consolidation binge in the early 1980s. But the firm apparently grew faster than its supervisory structure could handle. In 1985 Hutton pleaded guilty to 2,000 counts of mail and wire fraud for operating an elaborate check-kiting scheme in which the company's cash managers had used at least $10 billion from 400 banks without paying interest...
Struggling to put the scandal behind it, Hutton's board recruited Robert Rittereiser, 49, from Merrill Lynch.The board forced out Chairman Robert Fomon after promoting Rittereiser to chief executive. But the company was no quick- turnaround candidate. Last year Hutton posted a net loss of $90.3 million at a time when other brokerages were prospering. Even attempts to restore the firm's prestige seemed ineffectual. Hutton hired Bill Cosby as a TV spokesman in 1986 and recently changed its motto to "We listen...
...crash, which merely wounded Wall Street's stronger firms, was a staggering blow for the weakened Hutton. "The events of the last few weeks have altered the conditions under which we compete," said Rittereiser. "Prudence requires that we pursue this course." The most likely buyer may be Shearson Lehman Bros., which offered some $1.6 billion for Hutton a year ago. Now the price may be much lower: an estimated $1 billion. Several other firms, among them Dean Witter and Merrill Lynch, are said to be talking with Hutton. One possibility is that the company's departments will be sold separately...
...dolls, video villains, electronic spaceships and kiddie camcorders. But many of the latest playthings leave little to the imagination and nothing in the pocketbook. -- The Farmbelt is celebrating a good harvest and a modest recovery, but U. S. agriculture is still too reliant on federal aid. -- Ailing E. F. Hutton is listening -- to potential buyers...