Cogan, Berlind, Weill & Levitt
Encyclopedia
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.
Among the firms most notable partners were Sanford I. Weill, Arthur Levitt
, Arthur L. Carter
, Marshall Cogan
, Roger Berlind
and Peter Potoma.
, which was followed by an office at 60 Broad Street and then 55 Broad Street. The firm brought in $400,000 ($ million today) in revenue in 1960.
Carter, Berlind, as it was then known, initially carved out a niche as a small research boutique, though it also offered brokerage and investment banking services The firm was nicknamed "the Jewish DLJ" in reference to Donaldson Lufkin & Jenrette, a former investment banking firm acquired by Credit Suisse
in 2000.
In the winter of 1962 the firm learned from the New York Stock Exchange surveillance officer that Peter Potoma face suspension for "free-riding", a violation of the NYSE rules for which he would be suspended by the NYSE for one year. Shortly before his suspension, the other partners forced Potoma's resignation and dropped his name from the firm, becoming Carter, Berlind & Weill. In 1963, Arthur Levitt, the future Chairman of the Securities and Exchange Commission joined the firm. The next year, Marshall Cogan, who had previously worked at CBS
and investment firm Orvis & Co. before joining the firm as an auto sector research analyst in 1964.
Weill served as the firm's chairman beginning in 1965 and extending through its 1981 merger with American Express, ultimately leaving the firm in 1984. This period was marked by major consolidation of the old white shoe firms on Wall Street. Carter, Berlind under Weill's leadership was a driving force in this consolidation. During this period, Weill led Carter, Berlind, and its successors through more than 15 acquisitions. Carter, Berlind made its first acquisition in 1967, taking over Bernstein-Macaulay Inc., a well-respected firm founded by Peter L. Bernstein
, that specialized in investment management
.
Arthur Carter, increasingly unhappy at the firm, sold out his stake to his partners for several million dollars in 1968 and pursued a number of personal investments in manufacturing companies. Carter would go on to own a number of media properties first acquiring The Nation
and later founding the New York Observer
. On February 19, 1969, the firm changed its name to Cogan, Berlind, Weill & Levitt (CBWL), with the arrival of Marshall Cogan and Arthur Levitt). The firm was often referred to jokingly by Wall Street peers as Corned Beef With Lettuce. The firm brought in $19 million ($ million today) in 1969.
In addition to the firm's notable acquisitions, Carter Berlind, and later CBWL, was known for developing a number of future Wall Street executives. In 1970, Peter A. Cohen
joined CBWL-Hayden Stone and in 1973, Cohen became special assistant to Weill. Cohen would go on to serve as Chairman and CEO of the firm's successor, Shearson Lehman Brothers in the 1980s. Today, Cohen serves as Chairman and CEO of Cowen Group, formerly known as Cowen & Company. Similarly, Joe Plumeri, who later became president & managing partner of Shearson Lehman Brothers in 1990, and subsequently CEO of Willis Group Holdings
, joined CBWL in the 1960s. Looking for a part-time job while in law school, Plumeri incorrectly assumed CBWL to be a law firm. Despite the confusion, Weill hired Plumeri as a part-time clerk and gofer.
. In 1970, the firm employed more than 1,500 people, and brought in nearly $12 million in revenue.
In fact, the acquisition was so transformative for CBWL that in 1972, the CBWL was dropped from the name and the firm became Hayden Stone, Inc. in 1972. In August 1973, Marshall Cogan left the firm after disputes with his fellow partners to focus on leveraged buyout
s. Cogan would go on to acquire a series of businesses included General Felt Industries, Knoll
, the 21 Club
and Sheller-Globe Corporation
but would be unsuccessful in his bids to acquire the Boston Red Sox
, Sotheby's
and L.F. Rothschild
.
As the economic conditions worsened in 1974, Weill had the opportunity to acquire Shearson, Hammill & Co. a venerable Wall Street investment banking and brokerage firm founded in 1902. Following the merger with Shearson Hammill & Co., the name of the combined company was changed again, this time becoming Shearson Hayden Stone. Weill adopted the Shearson brand, which had become a household name in the 1960s through a series of television commercials that suggested "If You Want To Know What’s Going On On Wall Street, Ask Shearson Hammill." The firm had 63 offices in the US and internationally supported by a well-regarded securities research department.
In 1976, after completing the integration of the two companies, the successor, Shearson Hayden Stone, made two notable purchases: Lamson Brothers & Co., a commodities brokerage founded in the 19th century and Faulkner, Dawkins & Sullivan, a regional brokerage with an excellent equity research department. With these acquisition, the combined, in 1977 firm was the seventh largest investment banking firm in the United States with revenues of $134 million ($ million today; more than triple its 1972 levels, just five years earlier) and more than 4,000 employees nationwide.
Until shortly before the acquisition by Shearson, the firm, known as Loeb, Rhoades & Co., was one of Wall Street's oldest and most successful firms. In 1977, Loeb Rhoades acquired Hornblower, Weeks, Noyes & Trask to form Loeb, Rhoades, Hornblower & Co. 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. 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.
for about $930 million in stock to form Shearson/American Express, later known as Shearson Lehman Brothers following the 1984 acquisition of Lehman Brothers
. In 1981 Shearson Loeb Rhoades was sold to American Express for about $930 million in stock to form Shearson/American Express, later known as Shearson Lehman Brothers following the 1984 acquisition of Lehman Brothers.
In 1993, American Express decided to divest Shearson Lehman Brothers, completing an IPO of Lehman Brothers
and selling the core of what had been Shearson prior to the merger with Lehman Brothers to Sandford I. Weill's Primerica.
Investment banking
An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities...
and brokerage firm founded in 1960 and acquired by American Express
American Express
American Express Company or AmEx, is an American multinational financial services corporation headquartered in Three World Financial Center, Manhattan, New York City, New York, United States. Founded in 1850, it is one of the 30 components of the Dow Jones Industrial Average. The company is best...
in 1981. In its two decades as an independent firm, Cogan, Berlind, Weill & Levitt served as a vehicle for the rollup
Rollup
A Rollup is a technique used by investors where multiple small companies in the same market are acquired and merged. The principal aim of a rollup is to reduce costs through economies of scale. Rollups also have the effect of increasing the valuation multiples the business can command as it...
of more than a dozen brokerage and securities firms led by Sanford I. Weill
Sanford I. Weill
Sanford I. "Sandy" Weill is an American banker, financier and philanthropist. He is a former chief executive officer and chairman of Citigroup. He served in those positions until October 1, 2003, and April 18, 2006, respectively....
that culminated in the formation of Shearson Loeb Rhoades.
Among the firms most notable partners were Sanford I. Weill, Arthur Levitt
Arthur Levitt
Arthur Levitt, Jr. was the twenty-fifth and longest-serving Chairman of the United States Securities and Exchange Commission from 1993 to 2001. 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...
, Arthur L. Carter
Arthur L. Carter
Arthur L. Carter is an investment banker, publisher, and artist.He graduated from Brown University in 1953 with a degree in French literature....
, Marshall Cogan
Marshall Cogan
Marshall S. Cogan is an investor and entrepreneur and former financier and trader. Cogan was the founder of United Automotive Group, which he built into one of the largest retailers of cars and trucks in the U.S. As a private equity investor, Cogan acquired a number of businesses in the 1970s and...
, Roger Berlind
Roger Berlind
Roger S. Berlind is a New York City theatrical producer and director of Lehman Brothers Holdings, Inc. and Lehman Brothers Inc...
and Peter Potoma.
Early history
In May 1960, Arthur L. Carter, Roger Berlind, Peter Potoma, and Sanford I. Weill formed Carter, Berlind, Potoma & Weill, the firm's earliest predecessor with capital of $200,000 contributed by the four partners. The firm's first office was at 37 Wall Street37 Wall Street
37 Wall Street was built as an office building on Manhattan's Wall Street. It was designed by Francis Kimball and constructed during 1906-1907 for The Trust Company of America which occupied the ground floor. The building, completed in 1907, stands at 25 floors, plus a penthouse level that...
, which was followed by an office at 60 Broad Street and then 55 Broad Street. The firm brought in $400,000 ($ million today) in revenue in 1960.
Carter, Berlind, as it was then known, initially carved out a niche as a small research boutique, though it also offered brokerage and investment banking services The firm was nicknamed "the Jewish DLJ" in reference to Donaldson Lufkin & Jenrette, a former investment banking firm acquired by Credit Suisse
Credit Suisse
The Credit Suisse Group AG is a Swiss multinational financial services company headquartered in Zurich, with more than 250 branches in Switzerland and operations in more than 50 countries.-History:...
in 2000.
In the winter of 1962 the firm learned from the New York Stock Exchange surveillance officer that Peter Potoma face suspension for "free-riding", a violation of the NYSE rules for which he would be suspended by the NYSE for one year. Shortly before his suspension, the other partners forced Potoma's resignation and dropped his name from the firm, becoming Carter, Berlind & Weill. In 1963, Arthur Levitt, the future Chairman of the Securities and Exchange Commission joined the firm. The next year, Marshall Cogan, who had previously worked at CBS
CBS
CBS Broadcasting Inc. is a major US commercial broadcasting television network, which started as a radio network. The name is derived from the initials of the network's former name, Columbia Broadcasting System. The network is sometimes referred to as the "Eye Network" in reference to the shape of...
and investment firm Orvis & Co. before joining the firm as an auto sector research analyst in 1964.
Weill served as the firm's chairman beginning in 1965 and extending through its 1981 merger with American Express, ultimately leaving the firm in 1984. This period was marked by major consolidation of the old white shoe firms on Wall Street. Carter, Berlind under Weill's leadership was a driving force in this consolidation. During this period, Weill led Carter, Berlind, and its successors through more than 15 acquisitions. Carter, Berlind made its first acquisition in 1967, taking over Bernstein-Macaulay Inc., a well-respected firm founded by Peter L. Bernstein
Peter L. Bernstein
Peter Lewyn Bernstein was an American financial historian, economist and educator whose development and refinement of the efficient-market hypothesis made him one of the country's best known authorities in popularizing and presenting investment economics to the general public.-Education and...
, that specialized in investment management
Investment management
Investment management is the professional management of various securities and assets in order to meet specified investment goals for the benefit of the investors...
.
Arthur Carter, increasingly unhappy at the firm, sold out his stake to his partners for several million dollars in 1968 and pursued a number of personal investments in manufacturing companies. Carter would go on to own a number of media properties first acquiring The Nation
The Nation
The Nation is the oldest continuously published weekly magazine in the United States. The periodical, devoted to politics and culture, is self-described as "the flagship of the left." Founded on July 6, 1865, It is published by The Nation Company, L.P., at 33 Irving Place, New York City.The Nation...
and later founding the New York Observer
New York Observer
The New York Observer is a weekly newspaper first published in New York City on September 22, 1987, by Arthur L. Carter, a very successful former investment banker with publishing interests. The Observer focuses on the city's culture, real estate, the media, politics and the entertainment and...
. On February 19, 1969, the firm changed its name to Cogan, Berlind, Weill & Levitt (CBWL), with the arrival of Marshall Cogan and Arthur Levitt). The firm was often referred to jokingly by Wall Street peers as Corned Beef With Lettuce. The firm brought in $19 million ($ million today) in 1969.
In addition to the firm's notable acquisitions, Carter Berlind, and later CBWL, was known for developing a number of future Wall Street executives. In 1970, Peter A. Cohen
Peter A. Cohen
Peter A. Cohen was the former Chairman and Chief Executive Officer of Shearson Lehman Brothers, later known as Shearson Lehman Hutton from 1983 through 1990. Today, Cohen serves as Chairman and CEO of Cowen Group, formerly known as Cowen & Company.-Career:...
joined CBWL-Hayden Stone and in 1973, Cohen became special assistant to Weill. Cohen would go on to serve as Chairman and CEO of the firm's successor, Shearson Lehman Brothers in the 1980s. Today, Cohen serves as Chairman and CEO of Cowen Group, formerly known as Cowen & Company. Similarly, Joe Plumeri, who later became president & managing partner of Shearson Lehman Brothers in 1990, and subsequently CEO of Willis Group Holdings
Willis Group Holdings
Willis Group Holdings is a global insurance broker headquartered in the Willis Building, London, United Kingdom. It has more than 400 offices in 120 countries, and approximately 17,000 employees...
, joined CBWL in the 1960s. Looking for a part-time job while in law school, Plumeri incorrectly assumed CBWL to be a law firm. Despite the confusion, Weill hired Plumeri as a part-time clerk and gofer.
Acquisition of Hayden Stone
On September 11, 1970, following the acquisition of Hayden, Stone & Co., the firm was re-named CBWL-Hayden, Stone, Inc. to capitalize on the brand name of the older and much larger, albeit financially challenged, Hayden Stone. Hayden Stone, founded in 1892 had a large retail network and a significant investment banking department. Additionally, Hayden Stone had grossed $113 million in 1968, five times its gross in 1960, earning significant profits. However, in the late 1960s, Hayden Stone had difficulties with its administrative functions, particularly as the size of the firm had expanded so rapidly. The firm was ultimately forced by the New York Stock Exchange to cut back on its trading. By 1970, the firm was effectively controlled by a group of creditors. CBWL negotiated to acquire the bulk of Hayden Stone from its creditors including the firm's name, 28 of its branches with 500 brokers and roughly 50,000 accounts. By acquiring Hayden Stone, CBWL launched itself from relative obscurity to become a major firm on Wall StreetWall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...
. In 1970, the firm employed more than 1,500 people, and brought in nearly $12 million in revenue.
In fact, the acquisition was so transformative for CBWL that in 1972, the CBWL was dropped from the name and the firm became Hayden Stone, Inc. in 1972. In August 1973, Marshall Cogan left the firm after disputes with his fellow partners to focus on leveraged buyout
Leveraged buyout
A leveraged buyout occurs when an investor, typically financial sponsor, acquires a controlling interest in a company's equity and where a significant percentage of the purchase price is financed through leverage...
s. Cogan would go on to acquire a series of businesses included General Felt Industries, Knoll
Knoll (company)
Knoll is a design firm that produces office systems, seating, files and storage, tables and desks, textiles , and accessories for office and for the home. The company also manufactures furniture for the home by Ludwig Mies van der Rohe, Harry Bertoia, Florence Knoll , Frank Gehry, Maya Lin and...
, the 21 Club
21 Club
The 21 Club, often simply 21, is a restaurant and former prohibition-era speakeasy, located at 21 West 52nd Street in New York City.-Environment:...
and Sheller-Globe Corporation
Sheller-Globe Corporation
Sheller-Globe Corporation was a U.S. auto parts manufacturer and industrial conglomerate based in Toledo, Ohio. Formed in 1966 on a heritage of much older companies, Sheller-Globe grew through the acquisition of many other businesses before it was acquired by United Technologies Corporation in...
but would be unsuccessful in his bids to acquire the Boston Red Sox
Boston Red Sox
The Boston Red Sox are a professional baseball team based in Boston, Massachusetts, and a member of Major League Baseball’s American League Eastern Division. Founded in as one of the American League's eight charter franchises, the Red Sox's home ballpark has been Fenway Park since . The "Red Sox"...
, Sotheby's
Sotheby's
Sotheby's is the world's fourth oldest auction house in continuous operation.-History:The oldest auction house in operation is the Stockholms Auktionsverk founded in 1674, the second oldest is Göteborgs Auktionsverk founded in 1681 and third oldest being founded in 1731, all Swedish...
and L.F. Rothschild
L.F. Rothschild
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.-History:...
.
Consolidation in the 1970s – Shearson Hammill
Following the acquisition of Hayden, Stone & Co., the newly minted Hayden Stone, Inc. continued its strategy of growth by acquisition. In 1973, during the 1973-1974 stock market crash, the firm acquired H.L. Hentz and Saul Lerner & Company.As the economic conditions worsened in 1974, Weill had the opportunity to acquire Shearson, Hammill & Co. a venerable Wall Street investment banking and brokerage firm founded in 1902. Following the merger with Shearson Hammill & Co., the name of the combined company was changed again, this time becoming Shearson Hayden Stone. Weill adopted the Shearson brand, which had become a household name in the 1960s through a series of television commercials that suggested "If You Want To Know What’s Going On On Wall Street, Ask Shearson Hammill." The firm had 63 offices in the US and internationally supported by a well-regarded securities research department.
In 1976, after completing the integration of the two companies, the successor, Shearson Hayden Stone, made two notable purchases: Lamson Brothers & Co., a commodities brokerage founded in the 19th century and Faulkner, Dawkins & Sullivan, a regional brokerage with an excellent equity research department. With these acquisition, the combined, in 1977 firm was the seventh largest investment banking firm in the United States with revenues of $134 million ($ million today; more than triple its 1972 levels, just five years earlier) and more than 4,000 employees nationwide.
Finishing the puzzle – Loeb Rhoades
In 1979, Weill and the firm's successor, now Shearson Hayden Stone completed their most ambitious merger to that point, acquiring Loeb, Rhoades, Hornblower & Co. to make Shearson Loeb Rhoades the second largest investment banking firm. With capital totaling $250 million, Shearson Loeb Rhoades trailed only Merrill Lynch, Pierce, Fenner & Beane as the securities industry's largest firm.Until shortly before the acquisition by Shearson, the firm, known as Loeb, Rhoades & Co., was one of Wall Street's oldest and most successful firms. In 1977, Loeb Rhoades acquired Hornblower, Weeks, Noyes & Trask to form Loeb, Rhoades, Hornblower & Co. 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. 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.
Sale to American Express
In 1981 Shearson Loeb Rhoades was sold to American ExpressAmerican Express
American Express Company or AmEx, is an American multinational financial services corporation headquartered in Three World Financial Center, Manhattan, New York City, New York, United States. Founded in 1850, it is one of the 30 components of the Dow Jones Industrial Average. The company is best...
for about $930 million in stock to form Shearson/American Express, later known as Shearson Lehman Brothers following the 1984 acquisition of Lehman Brothers
Lehman Brothers
Lehman Brothers Holdings Inc. was a global financial services firm. Before declaring bankruptcy in 2008, Lehman was the fourth largest investment bank in the USA , doing business in investment banking, equity and fixed-income sales and trading Lehman Brothers Holdings Inc. (former NYSE ticker...
. In 1981 Shearson Loeb Rhoades was sold to American Express for about $930 million in stock to form Shearson/American Express, later known as Shearson Lehman Brothers following the 1984 acquisition of Lehman Brothers.
In 1993, American Express decided to divest Shearson Lehman Brothers, completing an IPO of Lehman Brothers
Lehman Brothers
Lehman Brothers Holdings Inc. was a global financial services firm. Before declaring bankruptcy in 2008, Lehman was the fourth largest investment bank in the USA , doing business in investment banking, equity and fixed-income sales and trading Lehman Brothers Holdings Inc. (former NYSE ticker...
and selling the core of what had been Shearson prior to the merger with Lehman Brothers to Sandford I. Weill's Primerica.
Notable former staff
- Roger BerlindRoger BerlindRoger S. Berlind is a New York City theatrical producer and director of Lehman Brothers Holdings, Inc. and Lehman Brothers Inc...
, theatrical producer and long-time board member of Lehman Brothers - Arthur L. CarterArthur L. CarterArthur L. Carter is an investment banker, publisher, and artist.He graduated from Brown University in 1953 with a degree in French literature....
, later owner of The Nation and founder of the New York Observer - Peter A. CohenPeter A. CohenPeter A. Cohen was the former Chairman and Chief Executive Officer of Shearson Lehman Brothers, later known as Shearson Lehman Hutton from 1983 through 1990. Today, Cohen serves as Chairman and CEO of Cowen Group, formerly known as Cowen & Company.-Career:...
, CEO of Shearson Lehman Hutton and current CEO of the Cowen Group - Marshall CoganMarshall CoganMarshall S. Cogan is an investor and entrepreneur and former financier and trader. Cogan was the founder of United Automotive Group, which he built into one of the largest retailers of cars and trucks in the U.S. As a private equity investor, Cogan acquired a number of businesses in the 1970s and...
, future private equity investor and founder of United Automotive Group - Clarence Benjamin JonesClarence Benjamin JonesClarence B. Jones is the former personal counsel, advisor, draft speech writer and close friend of Dr. Martin Luther King, Jr. He is a Scholar in Residence at the Martin Luther King, Jr. Institute at Stanford University...
, lawyer, advisor and speech writer of Martin Luther King, Jr.Martin Luther King, Jr.Martin Luther King, Jr. was an American clergyman, activist, and prominent leader in the African-American Civil Rights Movement. He is best known for being an iconic figure in the advancement of civil rights in the United States and around the world, using nonviolent methods following the...
, and financial services executive - Arthur LevittArthur LevittArthur Levitt, Jr. was the twenty-fifth and longest-serving Chairman of the United States Securities and Exchange Commission from 1993 to 2001. 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...
, Chairman of the Securities and Exchange Commission - Joe Plumeri, Citigroup executive, Chairman & CEO of the Willis Group, and owner of the Trenton ThunderTrenton ThunderThe Trenton Thunder are an American Minor League Baseball team and are the Double-A affiliate of the New York Yankees. The Thunder play in the Eastern Division of the Eastern League, and are the two-time defending league champions...
- Sanford I. WeillSanford I. WeillSanford I. "Sandy" Weill is an American banker, financier and philanthropist. He is a former chief executive officer and chairman of Citigroup. He served in those positions until October 1, 2003, and April 18, 2006, respectively....
, Chairman & CEO of CitigroupCitigroupCitigroup Inc. or Citi is an American multinational financial services corporation headquartered in Manhattan, New York City, New York, United States. Citigroup was formed from one of the world's largest mergers in history by combining the banking giant Citicorp and financial conglomerate... - Frank G. ZarbFrank G. ZarbFrank Gustave Zarb is an American businessman and former Republican politician. He is perhaps best known as the chairman of the NASDAQ stock exchange during the dot-com boom of the late 1990s...
, Energy CzarEnergy CzarEnergy Czar is a nickname, using the political term "czar", for the person in the Government of the United States given authority over energy policy within the executive branch...
under President Gerald FordGerald FordGerald Rudolph "Jerry" Ford, Jr. was the 38th President of the United States, serving from 1974 to 1977, and the 40th Vice President of the United States serving from 1973 to 1974...
, and former Chairman of NASDAQNASDAQThe NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...