E. F. Hutton

[Please see Edward Hutton for the Russian-born New York dentist Dr. Edward F. Hutton.]

Edward Francis Hutton (7 September 1875 [or 1877 or 1882] - 11 July 1962) was an American (born in New York, New York) financier and founder of E. F. Hutton & Company. His second wife (married 1920, divorced 1935) was the heiress Marjorie Merriweather Post; they built several famous houses (including Mar-a-Lago in Palm Beach, Florida) and yachts (including the Sea Cloud), and their only child was the actress Dina Merrill, who was for years the only female director on the board of the company her father founded in 1914.

The brokerage house E. F. Hutton & Co. Inc. was the tail that wagged the dog, the major component of what grew into a conglomerate of companies owned by E. F. Hutton Group Inc., whose stock was traded on the New York Stock Exchange. Other subsidiaries of that Delaware-chartered holding company were E. F. Hutton Trust Company (now "Smith Barney Corporate Trust Company" and owned by Citigroup), E. F. Hutton Life Insurance Company, and E. F. Hutton Bank. The Hutton companies also managed many mutual funds and other investment vehicles, some of which were separately incorporated and/or registered, and participated actively in corporate mergers and public offerings of securities. The firm was best known to the public for its commercials based on the phrase, "When E. F. Hutton talks, people listen."

The conglomerate was destroyed in the 1980s by corporate misconduct, most of it by the brokerage firm, which had knowingly engaged in money laundering for organized crime (the so-called "Pizza Connection" because money was sometimes delivered in pizza boxes, see External link (http://www.thelaborers.net/history/132_cong_rec_h_408_thursday.htm)) and other unlawful groups (including the "Iran-Contra Affair"). It was not until after the president of the brokerage firm, Scott Pierce (the brother of Barbara Bush, wife of the then-vice-president of the U.S.), entered his corporation's guilty plea to 2000 criminal counts of federal mail and wire fraud in 1985, however, that the Hutton conglomerate fell apart -- it was sold to and dismantled by what is now Citigroup, whose American Express[?] subsidiary had been engaged in joint ventures with the Hutton companies and so already had a financial stake in the conglomerate no one else offered to buy.

That criminal "check-kiting" involved fraud on Hutton's brokerage clients and the banks where it did business: When Hutton was supposed to send money to a brokerage customer from that customer's account, Hutton would draw a check on a bank account on the other side of the country from the customer and mail it; Hutton would not deposit the money to "cover" the check until days later, usually after it had already "cleared". Thus, Hutton was, in effect, getting short-term loans (termed "the float") from the banks for free and forcing the banks to make those loans by threatening not to keep its accounts with them if they did not. The value of the unpaid "interest" on those forced "loans" amounted to many millions of dollars and made a significant addition to Hutton's "bottom line".

Books about the E. F. Hutton companies :

• Burning Down the House: How Greed, Deceit, and Bitter Revenge Destroyed E. F. Hutton by James Sterngold (1990) {ISBN 0671709011}
• Diamond Dust by K. Kay Shearin (1992) {Full text}
• The Fall of the House of Hutton by Donna S. Carpenter and John Feloni (1989) {ISBN 0805009469}
• Sudden Death: The Rise and Fall of E. F. Hutton by Mark Stevens (1989) {ISBN 0453006736}