The second, the abolition of the brokers ’ fixed-rate commission structure in May, 1975, slashed profit margins by allowing fierce price competition among houses. The first of these, the Employee Retirement Income Security Act of 1974, increased the importance of institutional investors as a revenue source. In the late 1960s and the 1970s, lower stock market volume combined with two important legislative changes to radically alter the brokerage industry. Although it had long been one of the largest firms on Wall Street, it was still tiny by today ’s standards. For two decades after the merger, Paine Webber remained essentially the same kind of establishment it had been for the first 60 years of its existence: a privately owned brokerage house that made most of its money in the retail trade, buying and selling securities for private customers. The resulting conglomeration of Paine, Webber, Jackson & Curtis listed 23 branch offices. World War II finally ended America ’s economic slump, and in 1942 Paine Webber merged with Jackson & Curtis, a fellow old-line Boston house. Paine was also convicted in federal court of mail fraud and served four months in prison. But the New York Stock Exchange suspended Stephen Paine and Frank Hope, a fellow partner and former governor of the New York Stock Exchange, for ignoring evidence of the fraudulent nature of these transactions. The firm itself was ultimately cleared of all wrongdoing and ended its role in the case with damage payments to some of the creditors. Paine Webber, through Stephen Paine, loaned the money used in four of the takeovers and sold off the portfolios for the conspirators. Creditors of these trusts found themselves defrauded of more than $6 million. In the Continental Securities Corporation scandal of 1938 to 1939, a group of American and Canadian financiers gained control of six different investment trusts, sold off their portfolios, and filled them up again with unmarketable securities of dubious value, including shares in dummy companies owned by the conspirators themselves. Paine ’s son Stephen was a partner in the firm by this time, but it was through him that Paine Webber found itself embroiled in one of the major securities fraud cases of the decade. Paine, who had continued to head the firm, died in September, 1929. Wallace Webber had retired in 1894, and William A. Not only did the Depression mark the end of the Paine Webber ’s steady growth, but it had to face this period of crisis without the guidance of its founders. By the late 1930s, its presence had shrunk to 19 cities. Paine Webber maintained its standing as a leading Wall Street firm, but did not emerge from the Depression unscathed. By its 50th anniversary, in 1930, the firm could boast of 25 branch offices in 22 cities spread throughout the Northeast and upper Midwest, and a position as one of the largest firms on Wall Street.īut the bull market that had fueled this growth came to a shattering end in October, 1929, and the Great Depression that followed brought lean times to the brokerage industry. During the feverish years of the late 1920s, five more offices opened and six moved to larger quarters. Before this office opened, business in New York had been conducted by wire and through New York brokerage houses. Nine branches sprang into existence during World War I, including Paine Webber ’s first in New York City, in 1916.
Paine Webber opened its first branch office in 1899 in the copper mining town of Houghton, Michigan. It purchased seats on the Chicago Board of Trade in 1909 and the Chicago Stock Exchange in 1916. In 1890, the firm joined the New York Stock Exchange. The firm admitted Charles Paine as a partner in 1881 and changed its name to Paine, Webber & Company.įrom there, Paine Webber embarked on a steady course of expansion that would last well into the next century. The next year, Webber acquired a seat on the Boston Stock Exchange.
Paine and Wallace Webber, formerly clerks at Boston ’s Blackstone National Bank, who set up shop on Congress Street in Boston.
Paine & Webber was founded in 1880 by William A. From a tiny partnership founded more than a hundred years ago, PaineWebber has grown into a major international presence. The PaineWebber Group is one of the largest financial service companies in the world, offering asset management, investment banking, and brokerage activities to both institutional and individual investors. Incorporated: 1970 as Paine, Webber, Jackson & Curtis Inc.
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