Editing EF Hutton (section)

=== 1987 market crash and 1990s mergers ===
In early 1987, an internal probe revealed that brokers at an office in [[Providence, Rhode Island]], [[money laundering|laundered money]] for the [[Patriarca crime family]].  Although Hutton reported the investigation to the SEC, it was not enough to stop prosecutors from all but announcing that Hutton would be indicted.<ref>{{cite news |first=Richard |last=Halloran |title=U.S. Hints at Hutton Indictment in Money Scheme |work=New York Times |date=2007-10-11}}</ref>

In a case of especially bad timing, this came only a week before [[Black Monday (1987)|the 1987 stock market crash]].  By the end of November, Hutton had lost $76 million, largely due to massive trading losses and margin calls that its customers could not meet.  It also had its [[commercial paper]] rating cut from A-2 to A-3, effectively losing $1.3 million in financing.  Hutton was now weeks—perhaps days, according to some board members—from collapse.<ref name="NYTMerger">{{cite news|last=Sterngold|first=James|url=https://www.nytimes.com/1988/01/17/business/how-they-tore-hutton-to-pieces.html|title=How They Tore Hutton to Pieces|date=1988-01-17|work=New York Times|access-date=2020-03-14|at=Jan. 17, 1988, Section 3, Page 1 of the National edition}}</ref> On December 3, Hutton agreed to a merger with [[Shearson Lehman/American Express]].  The merger took effect in 1988, and the merged firm was named [[Shearson Lehman Hutton, Inc.]]<ref>*[https://www.nytimes.com/1987/12/03/business/shearson-reported-to-acquire-hutton-in-a-1-billion-deal.html Shearson Reported To Acquire Hutton In a $1 Billion Deal].  New York Times, December 3, 1987</ref>

It later emerged that Hutton had faced massive cash shorts as early as 1985, and the firm's management had tried to put it up for sale as early as 1986.<ref name="NYTMerger"/>

Following the merger, dozens of Hutton brokers left the firm to join competitors. At the same time, the combined firm suffered dwindling business from individual investors as its focus was shifted to large corporate transactions.<ref name=bonfire>[https://web.archive.org/web/20081215161205/http://www.time.com/time/magazine/article/0,9171,969389,00.html Vanities on The Bonfire: Peter Cohen]. Time, February 12, 1990</ref> The Hutton brand was used until 1990, when American Express abandoned the name and the business was renamed Shearson Lehman Brothers. [[Joe Plumeri]] became the President & Managing Partner of Shearson Lehman Brothers in 1990.<ref name="forbes1">{{cite web |url=https://people.forbes.com/profile/joseph-j-plumeri/86637 |title=Joseph J. Plumeri Profile |work=[[Forbes]] |access-date=July 15, 2010 |archive-url=https://web.archive.org/web/20100930012612/http://people.forbes.com/profile/joseph-j-plumeri/86637 |archive-date=September 30, 2010 |url-status=dead }}</ref><ref name="businessweek1998">{{cite news|last=Bianco |first=Anthony |url=http://www.businessweek.com/archives/1998/b3571114.arc.htm |archive-url=https://archive.today/20121209025016/http://www.businessweek.com/archives/1998/b3571114.arc.htm |url-status=dead |archive-date=December 9, 2012 |title=Joe Plumeri: The Apostle of Life Insurance |publisher=[[Business Week]] |date=March 30, 1998 |access-date=July 15, 2010}}</ref>

In 1992, Shearson sold The Boston Company, an asset management group, to [[Mellon Financial]]. In December 1988, the Boston Company had disclosed that it had overreported its earnings by $30 million.

In 1993, American Express sold its brokerage and asset management business—the Shearson and Hutton parts of Shearson Lehman Hutton—to [[Primerica]] for 1 billion dollars.<ref>{{Cite news|last=Quint|first=Michael|date=1993-03-13|title=Primerica Will Buy Shearson for $1 Billion (Published 1993)|language=en-US|work=The New York Times|url=https://www.nytimes.com/1993/03/13/business/primerica-will-buy-shearson-for-1-billion.html|access-date=2021-01-11|issn=0362-4331}}</ref> Primerica merged them with [[Smith Barney]] (which it had bought in 1987) to form '''Smith Barney Shearson,''' later shortened back to simply Smith Barney. As a result of several mergers throughout the 1990s, the remains of the original E.F. Hutton became part of [[Citigroup]], and later [[Morgan Stanley Wealth Management]], a joint venture between [[Morgan Stanley]] and Citigroup.