What’s in a name? The rebirth of an investment banking legend

This week, inspired by the re-emergence of a legendary brand from the past, GlobalCapital immersed in the murky world of investment banking brands.

The recently resurrected name is none other than Salomon Brothers, the bond trading giant made (even more) famous by the book Liar’s Pokeran insider’s account by former trader Michael Lewis.

This prompted some bankers to speculate which old brand would then be unearthed. A senior London official suggested Warburg – presumably referring to SG Warburg, the investment bank which was acquired by Swiss Bank Corporation in 1995 and has since been fully absorbed by UBS.

On second thought, Warburg would be a rather odd choice, given that there is an operational German private bank called MM Warburg and, of course, the private equity firm Warburg Pincus. It could be confusing.

A much more likely bet would be First Boston, the US mergers and acquisitions powerhouse that was eventually acquired by Credit Suisse. Indeed, when your correspondent followed the paper trail of the brand emanating from the new Salomon Brothers company, he discovered that work was already well underway to relaunch First Boston as well. You can read all about it in our main story, which also features a cameo from former US President Donald Trump.

The new Salomon Brothers and the nascent First Boston are clearly trying to exchange the cachet of a prestigious name. The peculiarity of this is that both brands are inextricably linked to the scandals and disasters that brought about their downfall in the first place.

In the case of Salomon Brothers, the company became embroiled in illegal attempts to corner the US Treasuries market and had to be rescued by Warren Buffet before eventually being bought out by Travelers Group in 1997.

Meanwhile, First Boston had to be bailed out by Credit Suisse after the 1989 junk bond crash left it struggling with bridge loans associated with the leveraged buyout of the Ohio Mattress Company, a situation described at the time as “the hot bed”. .

Renamed Credit Suisse First Boston, the company continued under its Swiss parent company and even acquired another famous brand, Donaldson, Lufkin & Jenrette, for $13 billion in 2000. It was an unfortunate time, just before the breakup of the internet bubble.

Credit Suisse retired the First Boston moniker in 2006, but still counts the cost, literally. In the last quarter of 2021, the company wrote off 1.6 billion Swiss francs ($1.7 billion) of goodwill “primarily related to the acquisition of Donaldson, Lufkin & Jenrette,” according to its latest earnings report.

But there seems to be no final chapter ignominious enough to undermine the goodwill of investment bankers of a certain age for the businesses they once cherished.

This was amply demonstrated by the reactions to the Salomon Brothers revival among alumni on LinkedIn. “Best workplace of my career,” one wrote. “Total freedom and total responsibility, with some of the greatest mentors of all time.”

The lingering mystique of fallen companies is also reflected in the price of memorabilia on online auction house eBay, where a (deflated) Lehman Brothers-branded rugby ball is listed at £225.

Given the residual value clearly associated with these historic names, are the companies’ legal successors bothered by upstarts trying to cash in on them? If they are, they don’t say so.

A spokesman for Salomon Brothers’ successor company, Citigroup, suggested that was ancient history. “Almost 20 years ago, we unified our branding under ‘Citi’ and no longer use the names of our predecessor companies,” she said. GlobalCapital.

Credit Suisse played its cards closer to its chest, flatly refusing to comment on the new owner of the First Boston brand.

It’s hard to imagine they wouldn’t be a little irritated, especially when they see that new company Salomon Brothers has covered its website in gravestones for the big M&A deals of 1997.

But can they do anything about it?

To retain legal rights to a trademark, at least under US intellectual property law, it must be continuously used in commerce. This prevents a large company like Citi that wants to present one face to the world from stopping squatters from taking over discontinued brands like Salomon Brothers.

But there can be solutions, as long as the large company in question doesn’t mind having a rather messy list of affiliates.

Take Bank of America, whose investment banking division was known as Bank of America Merrill Lynch until a name change in 2019. The group still uses Merrill Lynch as the name of its wealth management division, which should be enough to prevent an entrepreneur with an eye for brand equity from registering as a trademark in the financial services industry.

But that’s not all. To this day, BofA also actively uses a subsidiary with the much older name of Merrill Lynch, Pearce, Fenner and Smith. Brand hunters will have to look elsewhere.

Trademark attorneys who wish to update us on US intellectual property law should email [email protected] or call +44 (0)20 7779 7315. We would also like to hear confidential news from financial market professionals about any new jobs. or new recruits.

Want to access more GlobalCapital content? Contact us on +44 (0)207 779 8338 or send an e-mail to [email protected] to inquire about a lawsuit.

About Brandon A. Hood

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