Revived EF Hutton Breaks Up as Partners Resolve Legal Fight
That firm merged with Shearson Lehman/American Express Inc. in 1988.
The EF Hutton trademark was acquired in 2021 and adopted as a rebrand of Kingswood Capital Markets, the investment banking arm of Benchmark Investments LLC. Rallo, who joined Benchmark in 2020 from Aegis Capital Corp., became EF Hutton’s CEO and held a large stake in the firm.
Trump SPAC
In 2021 and 2022, EF Hutton became a top underwriter of special purpose acquisition company listings, including for the SPAC that later acquired Trump Media & Technology Group.
According to the firm’s suit, EF Hutton had banking and underwriting revenue of almost $150 million in 2021. It said Rallo was paid more than $44 million in compensation in 2021 and 2022.
The firm’s suit said that agents from the Department of Homeland Security and the U.S. Postal Inspection Service arrived at Rallo’s home in May and served him with a warrant for his phone.
EF Hutton said it subsequently learned Rallo was a subject of a federal probe and determined that he couldn’t continue in his role as CEO while it was ongoing.
People familiar with the matter subsequently confirmed that Rallo was served a search warrant as part of a securities and wire fraud investigation led by the U.S. attorney’s office in Brooklyn, New York.
In his suit, Rallo claimed Boral seized on the federal warrant to take control of EF Hutton.
The cases are EF Hutton Partners LLC v. Rallo, 654880/2024, New York State Supreme Court (Manhattan) and Rallo v. Boral, 24-0987, Delaware Court of Chancery (Wilmington).
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