Loeb, Rhoades & Co.

Last updated
Loeb, Rhoades & Co.
Type Defunct
Industry Brokerage
Founded1931
Founders Carl M. Loeb
John Langeloth Loeb Sr.
FateMerged with Shearson Hayden Stone to form Shearson Loeb Rhoades, later Shearson/American Express
Headquarters New York City, United States

Loeb, Rhoades & Co. was a Wall Street brokerage firm founded in 1931 and acquired in 1979 by Sanford I. Weill's Shearson Hayden Stone. Although the firm would operate as Shearson Loeb Rhoades for two years, the firm would ultimately be acquired in 1981 by American Express to form Shearson/American Express and three years later Shearson Lehman/American Express.

Contents

History

The firm was founded as Carl M. Loeb & Co. by Jewish father Carl M. Loeb and son John Langeloth Loeb Sr. in 1931, shortly after the onset of the Great Depression. Carl M. Loeb & Co. merged with Rhoades & Company, a white shoe Wall Street brokerage firm, in 1937 to form what became Loeb, Rhoades & Co. Rhoades & Company had been founded in 1905 by John Harsen Rhoades Jr. (born 1869), formerly a partner of Rhoades & Richmond. [1] The firm operated under the Loeb, Rhoades name from 1937 through 1979 when it briefly used the name Shearson Loeb Rhoades, for two years prior to its acquisition by American Express in 1981.

Carl Loeb, who had built his personal wealth as president of American Metal Company resigned from the company and bought a seat on the New York Stock Exchange, at the urging of his son John in 1931. While on the New York Stock Exchange, he pushed through many reforms. [2] Three years after Loeb left American Metals, the company's stock was nearly worthless. [3] Together with his son, Carl ran Loeb, Rhoades for its first 24 years, from 1931 until his death in 1955. John L. Loeb was a partner in the firm from 1931 to 1955 and following the death of his father became the senior partner, a role which he retained through 1977 when the firm was merged. In 1951, John Loeb became a governor of the New York Stock Exchange. In 1956, Loeb, Rhoades acquired a controlling interest in the Cuban Atlantic Sugar Company and sold its stake on December 31, 1958, a day before the Cuban Revolution. [4]

In 1973, Carl M. Mueller assumed management control of the firm before Loeb resumed his management responsibilities in the firm in 1977. Loeb oversaw the merger of Loeb, Rhoades with Hornblower, Weeks, Noyes & Trask to form Loeb, Rhoades, Hornblower & Co. in January 1978 before handing over day to day control of the firm to his nephew, Thomas Kempner, a grandson of Carl Loeb who had joined the firm in 1950. [4]

The Hornblower merger turned out to be disastrous for Loeb, Rhoades. The two firms incurred significant costs attempting to merge their back office operations, both of which had issues prior to the merger. By the end of 1978, less than a year after the merger, the combined firm was losing millions of dollars. Through the 1960s and 1970s, Sanford I. Weill was acquiring brokerage firms and by 1979 was running Shearson Hayden Stone, the culmination of nearly a dozen acquisitions. By early 1979, Loeb, Rhoades, now known as Loeb, Rhoades, Hornblower & Co. was suffering and looking for a potential acquiror. During Mothers Day Weekend 1979, Loeb and Shearson agreed to a merger to form Shearson Loeb Rhoades. Weill was named the CEO of the combined firm and John Loeb became the firm's chairman. At the time, Shearson Loeb Rhoades was among the largest investment banking houses with $250 million of equity capital. [4] [5]

In 1981, Shearson Loeb Rhoades bought the Boston Company holding company of the Boston Safe Deposit & Trust Co., a money manager. The same year, Weill sold the combined company to American Express to form Shearson/American Express.

Loeb Partners Corporation

Loeb Partners Corporation, a registered broker-dealer and investment advisor, had close ties with Loeb, Rhoades. Loeb Partners Corporation was founded by Thomas L. Kempner in 1982 to focus on managing assets for the Loeb family, wealthy clientele and institutions. Kempner, a grandson of Carl M. Loeb, was the final chairman of Loeb, Rhoades, serving from 1978 until the sale of the company in 1979.

Loeb Partners launched the Loeb Arbitrage Fund in 1988 as an investment vehicle for the Loeb family and other family office clients.

In 2008, Loeb Capital Management, a d/b/a for Loeb Arbitrage Management, Loeb Offshore Management and Carl M. Loeb Advisory Partners Inc., was launched under common control with Loeb Partners Corporation.

In 2013 Loeb Capital Management was renamed Loeb King Capital Management.

Acquisition history

The following is an illustration of the company's major mergers and acquisitions and historical predecessors (this is not a comprehensive list): [6]


Shearson Lehman Hutton
(merged 1988)
Shearson Lehman Brothers
(merged 1984)
Shearson/American Express
(merged 1981)

American Express
(est. 1850)

Shearson Loeb Rhoades
(acquired 1981)
Shearson Hayden Stone
(merged 1973)
Hayden Stone, Inc.  (formerly CBWL-Hayden Stone, merged 1970)

Cogan, Berlind, Weill & Levitt
(formerly Carter, Berlind, Potoma & Weill, est. 1960)

Hayden, Stone & Co.

Shearson, Hammill & Co.
(est. 1902)

Loeb, Rhoades, Hornblower & Co.
(merged 1978)
Loeb, Rhoades & Co.
(merged 1937)

Carl M. Loeb & Co.
(est. 1931)

Rhoades & Company
(est. 1905)

Hornblower, Weeks, Noyes & Trask
(merged 1953-1977)

Hornblower & Weeks
(est. 1888)

Hemphill, Noyes & Co.
(est. 1919, acq. 1963)

Spencer Trask & Co.
(est. 1866 as Trask & Brown)

Paul H. Davis & Co.
(est. 1920, acq. 1953)

Lehman Brothers Kuhn Loeb
(merged 1977)

Lehman Brothers
(est. 1850)

Kuhn, Loeb & Co.
(est. 1867)

Abraham & Co.
(est. 1938, acq. 1975)

E. F. Hutton & Co.
(est. 1904)

Notable alumni

See also

Related Research Articles

EF Hutton was an American stock brokerage firm founded in 1904 by Edward Francis Hutton and his brother, Franklyn Laws Hutton. Later, it was led by well known Wall Street trader Gerald M. Loeb. Under their leadership, EF Hutton became one of the most respected financial firms in the United States and for several decades was the second largest brokerage firm in the country.

<span class="mw-page-title-main">Sanford I. Weill</span> American banker and philanthropist (born 1933)

Sanford I. "Sandy" Weill is an American banker, financier and philanthropist. He is a former chief executive and chairman of Citigroup. He served in those positions from 1998 until October 1, 2003, and April 18, 2006, respectively.

Morgan Stanley Wealth Management is an American multinational financial services corporation specializing in retail brokerage. It is the wealth & asset management division of Morgan Stanley. On January 13, 2009, Morgan Stanley and Citigroup announced that Citigroup would sell 51% of Smith Barney to Morgan Stanley, creating Morgan Stanley Smith Barney, which was formerly a division of Citi Global Wealth Management. The combined brokerage house has 17,646 financial advisors and manages $2 trillion in client assets. Clients range from individual investors to small- and mid-sized businesses, as well as large corporations, non-profit organizations and family foundations.

<span class="mw-page-title-main">Lehman Brothers</span> Defunct American financial services firm

Lehman Brothers Inc. was an American global financial services firm founded in 1847. Before filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States, with about 25,000 employees worldwide. It was doing business in investment banking, equity, fixed-income and derivatives sales and trading, research, investment management, private equity, and private banking. Lehman was operational for 158 years from its founding in 1850 until 2008.

<span class="mw-page-title-main">Arthur Levitt</span> American businessman, journalist and 25th SEC chairman

Arthur Levitt Jr. is the former Chairman of the United States Securities and Exchange Commission (SEC). He served from 1993 to 2001 as the twenty-fifth and longest-serving chairman of the commission. Widely hailed as a champion of the individual investor, he has been criticized for not pushing for tougher accounting rules. Since May 2001 he has been employed as a senior adviser at the Carlyle Group. Levitt previously served as a policy advisor to Goldman Sachs and is a Director of Bloomberg LP, parent of Bloomberg News.

Kuhn, Loeb & Co. was an American multinational investment bank founded in 1867 by Abraham Kuhn and his brother-in-law Solomon Loeb. Under the leadership of Jacob H. Schiff, Loeb's son-in-law, it grew to be one of the most influential investment banks in the late 19th and early 20th centuries, financing America's expanding railways and growth companies, including Western Union and Westinghouse, and thereby becoming the principal rival of J.P. Morgan & Co.

Dean Witter Reynolds was an American stock brokerage and securities firm catering to a variety of clients. Prior to the company's acquisition, it was among the largest firms in the securities industry with over 9,000 account executives and was among the largest members of the New York Stock Exchange. The company served over 3.2 million clients primarily in the U.S. Dean Witter provided debt and equity underwriting and brokerage as mutual funds and other saving and investment products for individual investors. The company's asset management arm, Dean Witter InterCapital, with total assets of $90.0 billion prior to the acquisition, was one of the largest asset management operations in the U.S.

Hayden, Stone & Co. was a major securities firm founded in 1892 by Charles Hayden and Galen L. Stone. The firm was acquired by Cogan, Berlind, Weill & Levitt in 1972 and, after its name disappeared in 1979, was part of what would become Shearson/American Express in 1981.

L.F. Rothschild was a merchant and investment banking firm based in the United States and founded in 1899. The firm collapsed following the 1987 stock market crash.

<span class="mw-page-title-main">Shearson</span> Series of investment banking and retail brokerage firms

Shearson was the name of a series of investment banking and retail brokerage firms from 1902 until 1994, named for Edward Shearson and the firm he founded, Shearson Hammill & Co. Among Shearson's most notable incarnations were Shearson / American Express, Shearson Lehman / American Express, Shearson Lehman Brothers, Shearson Lehman Hutton and finally Smith Barney Shearson.

<span class="mw-page-title-main">Shearson, Hammill & Co.</span>

Shearson, Hammill & Co. was a Wall Street brokerage and investment banking firm founded in 1902 by Edward Shearson and Caleb Wild Hammill. The firm originally built its business as a stock broker as well as a broker of various commodities, particularly grain and cotton. The firm was a member of the New York Stock Exchange, the Chicago Stock Exchange and the Chicago Mercantile Exchange.

Cogan, Berlind, Weill & Levitt, originally Carter, Berlind, Potoma & Weill, was an American investment banking and brokerage firm founded in 1960 and acquired by American Express in 1981. In its two decades as an independent firm, Cogan, Berlind, Weill & Levitt served as a vehicle for the rollup of more than a dozen brokerage and securities firms led by Sanford I. Weill that culminated in the formation of Shearson Loeb Rhoades.

Shearson was a well-known brand in the financial services industry from 1901 through 1993, related to the following:

Hornblower & Weeks was an investment banking and brokerage firm founded by Henry Hornblower and John W. Weeks in 1888. At its peak in the late 1970s, Hornblower ranked eighth among member firms of the New York Stock Exchange in number of retail offices, with 93 retail sales offices located in the United States and Europe.

Peter A. Cohen is the chairman and CEO of Andover National Corporation, a public holding company. He was formerly the chairman and CEO of Cowen Inc., also known as Cowen & Company now TD Cowen. Prior to his current role, Cohen founded Ramius Capital Management in 1994, a $13 billion investment firm, which he merged with Cowen Inc. in 2009. Prior to this, Cohen was the chairman and chief executive officer of Shearson Lehman American Express from 1983 through 1991.

<span class="mw-page-title-main">Dain Rauscher Wessels</span> Former brokerage and investment banking firm based in Minneapolis, Minnesota

Dain Rauscher Wessels was a brokerage and investment banking firm based in Minneapolis, Minnesota. The firm traced its origins to a number of smaller regional securities firms founded in the 1920s and 1930s.

<span class="mw-page-title-main">John Langeloth Loeb Sr.</span> American investor

John Langeloth Loeb Sr. was an American investor and executive who served as president of Loeb, Rhoades & Company.

<span class="mw-page-title-main">Carl M. Loeb</span> American businessman born in Germany

Carl Morris Loeb was a German-born American businessman who served as the president of the American Metal Company and the founder of Carl M. Loeb & Co, which became Loeb, Rhoades & Co. in 1938.

Alan Horace Kempner was an American stockbroker, publishing executive, rare books and manuscripts collector, and philanthropist.

Thomas Lenox Kempner Jr. is an American investment banker and philanthropist.

References

  1. ↑ Told 'Round the Ticker: Rhoades & Richmond have dissolved partnership. New York Times, April 30, 1905
  2. ↑ Stack, Elizabeth. "Carl Morris Loeb." In Immigrant Entrepreneurship: German-American Business Biographies, 1720 to the Present, vol. 4, edited by Jeffrey Fear. German Historical Institute. Last modified September 25, 2014.
  3. ↑ Libo, Kenneth; Skakun, Michael. "Fulfilling The American Dream: The History Of The Loebs From Colonial Days To The Present". Center for Jewish History. Archived from the original on July 17, 2012. Retrieved January 17, 2017.
  4. 1 2 3 "Loeb Capital Partners timeline". Loebcap.com. Archived from the original on 2012-02-27. Retrieved 2012-07-18.
  5. ↑ The Urge to Merge. New York Magazine, May 28, 1979, p. 13
  6. ↑ "Salomon Smith Barney" from Gambee, Robert. Wall Street . W. W. Norton & Company, 1999. p.73
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.