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 1 History 2 Loeb Partners Corporation 3 See also 4 References 5 External links

[edit] History

The firm was originally founded as Carl M. Loeb & Co. by father Carl M. Loeb and son John L. Loeb 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. The firm operated under the Loeb, Rhoades name from 1937 through its acquisition by American Express in 1981.

Carl Loeb, who had built his personal wealth as president of American Metals Company resigned from the company and bought a seat on the New York Stock Exchange, at the urging of his son John in 1931. Three years after Loeb left American Metals, the company's stock was nearly worthless.^[1] Together with his son John, Carl ran the firm 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 sells its stake on December 31, 1958, a day before the Cuban Revolution.^[2]

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.^[2]

The Hornblower merger turned out to be disastrous for Loeb Rhoades. The two firms incured 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 acqusitions. 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.^[2]

Just two years later, in 1981, Weill sold the combined company to American Express to form Shearson/American Express.

[edit] Loeb Partners Corporation

Loeb Partners Corporation, a merchant banking firm, also managed by John L. Loeb had close ties with Loeb, Rhoades. Loeb Partners was founded after the merger of Loeb Rhoades and Shearson Hayden Stone to form Shearson Loeb Rhoades by several of the Loeb Family members including John L. Loeb, Henry Loeb and Thomas Kempner.

Loeb Partners launched the Loeb Arbitrage Fund in 1988 as an investment vehicle for the Loeb family and other family office clients which included the Loeb, Lehman, Bronfman and Kempner families.^[2] The firm's successor, Loeb Capital Management is one of a group of family of companies. Loeb's affiliates include a registered broker/dealer, investment advisors and private investment vehicles available to institutions and high net worth participants.

[edit] See also

• Hayden, Stone & Co.
• Shearson, Hammill & Co.
• Cogan, Berlind, Weill & Levitt
• Shearson/American Express
• Hornblower & Weeks

[edit] References