History
L.F. Rothschild & Co. was founded in 1899 by Louis F. Rothschild (1869–1957). Together with partner Leonard Hochstadter, Rothschild took up the offices and business of Albert Loeb & Co. at 32 Broadway. The firm's primary business was sales and trading of fixed income securities. The firm also had an arbitrage group as well as retail brokerage and wealth management operations.
Following its merger with C.E. Unterberg, Towbin in 1977, the firm was known as L. F. Rothschild, Unterberg, Towbin and was led primarily by Thomas I. Unterberg and A. Robert Towbin. The firm was known for its merchant banking investments, particularly in high-technology companies. In the early 1980s, the firm emerged as the leading underwriter of initial public offerings, surpassing the elite investment banks (at the time, including Lehman Brothers, Goldman Sachs and Morgan Stanley). Among the companies they took public were Intel, Cray Research and biotechnology company Cetus Corporation.
In 1986, just ten years after merging with L.F. Rothschild, Towbin and Unterberg left the firm to join Shearson Lehman. The split was attributed to their opposition to plans to expand the firm's bond sales and trading operations. However, in the negotiations with outside firms related to that expansion and capital infusion, at least one particularly attractive offer required that Unterberg and Towbin step down from management positions or leave the firm. Hard feelings between senior management that resulted by considering that offer were believed to be the causal factor behind their departure by most insiders. Ultimately, the firm's stock trading exposure during the stock market crash in 1987 led directly to its demise. Towbin and Unterberg would leave Lehman four years later, in 1990 to form C.E. Unterberg, Towbin.
The firm suffered heavy losses in the 1987 stock market crash and was acquired by Kansas-based Franklin Savings Association in February 1988. However, even with new capital, the firm's holding company, L. F. Rothschild Holdings Inc. filed for Chapter 11 bankruptcy protection in July 1989. By the end of 1989, the firm had gone from a peak of 2,200 employees to 45 now rebuilding under Angelo, Gordon & Co private firm. It will handle daily operations of Electtonic Funds (EFT) with automated clearing house from direct payments. New systems will handle e-commerce payment systems, electronic money, electronic funds transfer at point of sale, and hardware security module Transfer for several subsidiary which is Washington State-owned enterprise with Dean Moloney operating theoretical control in principle. .
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