E. F. Hutton

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

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Edward Francis Hutton (September 7, 1875 [or 1877 or 1882] - July 11, 1962) was an American (born in New York, New York) financier and co-founder of E. F. Hutton & Company with Franklyn Laws Hutton and Gerald M. Loeb.

His second wife was General Foods heiress Marjorie Merriweather Post, whom he married in 1920. During their marriage (which ended in divorce in 1935) they built several famous houses including Mar-A-Lago (now owned by Donald Trump and operated as the Mar-a-Lago Club) in Palm Beach, Florida, and the largest privately owned sea-going yacht or the era, the "Hussar V", which is best known as the Sea Cloud. Their only child, actress Dina Merrill, (born Nadina Hutton) for years served as the only female director on the board of the company her father founded in 1914. The Hutton's divorced after evidence of E.F. Hutton's affairs with other women became public. Hutton also was the uncle of Woolworth heiress Barbara Hutton.

Corporate Interests

The brokerage house E. F. Hutton & Co. Inc. was the prinicipal component of what grew into a conglomerate of companies owned by E. F. Hutton Group Inc., listed 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 for its commercials based on the phrase, "When E. F. Hutton talks, people listen."

The conglomerate disintegrated in the 1980s due to corporate misconduct, mostly by the brokerage firm. The firm 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, that the Hutton conglomerate fell apart. It was sold to and dismantled by what is now Citigroup, whose American Express subsidiary had engaged in joint ventures with the Hutton companies.

The 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}
• 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}

External Links

• West Palm West Historical Society, Mar-A-Lago (http://www.historicalsocietypbc.org/news_JudgeKnottAward.asp)

• The Sea Cloud (http://www.travellady.com/ARTICLES/article-seacloud.html)

• Sea Cloud Statistics (http://college.hmco.com/history/readerscomp/ships/html/sh_082200_seacloud.htm)