The Early Years. . .

The Weeden family's involvement in the securities industry spans generations. The firm traces its roots in the business back to 1913, when Frank Weeden, the son of a sea captain, signed on as the first salesman for a San Francisco brokerage firm newly formed by Charles Blyth and Dean Witter. That particular pairing didn't last long–the partnership was split in the early 1920's into the retail firm of Dean Witter and the investment banking firm of Blyth & Co. But it did serve to launch not only its partners but a determined Frank Weeden along their separate paths to legendary status in Wall Street.

In 1922, Frank Weeden, along with his younger brother, Norman, struck out on their own to found Weeden & Co. in the City by the Bay. Their specialty: handling transactions for a short list of institutional clients, mostly in conservative municipal bonds. The firm's starting capital: $25,000.

The firm expanded cautiously during the Roaring 'Twenties, becoming a Federal Reserve registered dealer in U.S. government securities and a major participant in corporate and municipal bond underwritings. In 1928, it underwrote the first public offering of convertible preferred stock. But the Weeden brothers steered clear of direct involvement in the era's booming equities market.

Their conservative bent enabled Weeden & Co. not only to survive the Crash of '29, but to actually prosper during the Great Depression. In a stroke of great timing, Weeden began trading equities in 1932, near the bottom of the bear market.

After WWII, in 1949, Weeden started making net markets in the common stock of industrial corporations-and began building a reputation for providing these "best executions" for its institutional clients. By 1963 this business had been dubbed "The Third Market" by the SEC and Weeden had emerged as the dominant market maker in these off-exchange large block trades for institutional clients. Efforts spearheaded by Frank Weeden's son, Don, ultimately led to the removal of fixed commission rates and resulted in significantly lower costs for all investors.

By the late 'Sixties, under Don Weeden's influence, the firm had also established itself as a leading proponent and backer of systems that married the increasing power of computer technology to trading. The younger Weeden, who back in 1959 had contributed founding capital to National Semiconductor, involved the firm as an early investor in AutEx, Quotron and Instinet. Those experiences led, in 1974, to the establishment of the Weeden Holdings Automated Market System, the first exchange-based electronic trading system, on the Cincinnati Stock Exchange. Weeden also helped to organize the NASD and was an early advocate of the public dissemination of market quotes.

In 1967, Frank Weeden–long since recognized as one of the most powerful men in Wall Street – retired at age 75. He turned over the reins at Weeden & Co to the three of his four sons who had followed him into the business: Alan, Jack and Don. It was a natural decision. All of the brothers were already highly accomplished–and were subsequently to distinguish themselves even more in a variety of chosen pursuits. But none shared their father's single-minded devotion to the securities business.

The Controversial Years. . .

Weeden's creation of the Third Market for the block trading equities eventually reshaped not merely the firm, but the entire landscape of Wall Street. The 'Sixties saw the rise of institutional investors-insurance companies, pension plans and mutual funds-to dominance in Wall Street. But as the institutions' clout grew, so too did their frustration with New York Stock Exchange's refusal to grant volume discounts on the commission rates it charged on large block trades.

Against that backdrop, Weeden's provision of a Third Market, in which institutions could trade large blocks of stock, off the exchange, on a net basis, proved irresistible to many. The Third Market grew rapidly. By the early 'Seventies around a dozen third market firms–of which Weeden was by far the largest–were handling close to 10% of all trades in Big Board-listed stocks–off the exchange. And the threat posed by the Third Market to the comfortable livelihood of Wall Street's club was palpable.

Weeden's Third Market trading activities, no surprise, were anathema to the New York Stock Exchange establishment, which had grown fat and happy by keeping commissions fixed at high rates and by barring member firms from trading in other marketplaces–even if those other markets offered better bids. That Don Weeden also led the campaign, during the early 'Seventies, to get the Big Board to abandon fixed commission rates, did nothing to burnish the firm's reputation among the Street's old guard.

It was not a battle Don Weeden eagerly joined. He knew, as he wrote in a letter to the Securities and Exchange Commission, that forcing the NYSE to adopt negotiated commission rates would undermine the ability of his own non-member firm, and that of other Third Market firms, to undercut the Exchange's high fixed tariffs. But negotiated commissions, Weeden recognized, were part and parcel of his push to level the playing field for investors by eliminating anti-competitive practices at the Exchange.

What's more, while Weeden's high profile against fixed commissions won the firm few friends among competing brokers, it was very much in the interest of the firm's institutional clients–its foundation and always its focus. In the end, the competitive heat turned up by Weeden's aggressive Third Market trading and Don Weeden's relentless campaigning against fixed commissions–not to mention the SEC–proved potent prods. The New York Stock Exchange was forced to do the right thing. On May 1, 1975, "May Day" the Big Board's commission rates were deregulated. And a new era of competition began in Wall Street. Twenty-three years later, Don Weeden was recognized as the "Father of Electronic Trading" with a Lifetime Achievement Award from The Chicago Stock Exchange.

The Transition Years. . .

In the immediate aftermath of Mayday, however, Weeden's business took it on the chin, as Don Weeden had felt might happen, as commission rates on stock trades plummeted. And that wasn't all that ailed the firm in the second half of the 'Seventies. The Weeden brothers, long at least as actively involved in environmental and political causes as they were in Wall Street, began withdrawing from active management of the firm. (Already, back in 1968, Don Weeden had run, unsuccessfully, for a seat in Congress, as a Republican in a heavily Democratic Manhattan district.) Late in 1975, the brothers ceded day-to-day operations of the firm for the first time to a non-family member. The new CEO went on an expansion spree, opening new offices, acquiring two small firms, nearly doubling the number of Weeden employees and ballooning its inventory position in securities. Alas, just in time for the worst bear market since the 'Thirties...

In 1978, Don Weeden, who had retained chairmanship of the firm, assumed the CEO's mantle. But, with the firm's capital dangerously depleted, he had no choice but to arrange a merger. Weeden's newer ancillary ventures went by the wayside but its core block trading unit was folded into the firm that became known as Moseley, Hallgarten, Estabrook & Weeden. The separate Weeden Equity Trading department, during its six years within Moseley, consistently ranked as the combined firm's largest profit center.

By 1985, Moseley, in its turn, was sinking. But that same year, its Weeden block trading unit generated $11 million in revenues and ample profits. And a small group of its key employees, led by head trader Barry Small, was determined not to allow the block trading desk to be disbanded.

Today's Weeden. . .

In January 1986, Weeden & Co. LP was reborn as a newly independent, employee-owned firm, with $10 million in founding capital. Some $3.5 million of the new Weeden's capital was put up by Don Weeden and 28 co-workers. The rest was contributed by outside investors, the Weyerhaeuser family prominent among them. Head trader Barry Small assumed day-to-day leadership of the newly independent firm and Don Weeden continued as chairman. Barry Small was officially named Weeden's chief executive officer in 1995, in recognition of the pivotal role he played–and continues to play–in propelling the new Weeden into the top ranks of institutional trading firms. Weeden employees now own more than 80% of the firm.

The Weeden heritage–decades of providing efficient executions for its customers–is today being expressed by experienced professionals utilizing state-of-the-art technology to enhance the quality and lower the cost of transactions.

Weeden & Co. has and will continue to offer its ideas, capital and experience to improve the market for its customers.