EF Hutton, the storied Wall Street name that was reborn as a leading SPAC investment bank, is breaking up after the two partners that revived the brand agreed to drop lawsuits against each other and go their own ways.
The firm said in a statement issued Sunday that Joseph Rallo and David Boral agreed to take their businesses "in different directions."
Rallo will keep the EF Hutton name and trademark, while Boral will retain control of the broker-dealer that operated under the brand, according to the statement. A spokesman for Rallo confirmed the agreement on Monday.
EF Hutton sued Rallo last month, accusing him of stealing millions of dollars in falsified expenses and seeking an order stating he had been properly terminated as chief executive officer.
Rallo hit back with a suit accusing Boral of illegally trying to take control of the firm out of jealousy that his partner was perceived as the "driving force" of the revived EF Hutton's success. Both suits made salacious claims about the men's personal conduct.
"Any public statements they made about each other as they worked through the separation of their business should not be viewed as a reflection on Mr. Rallo or Mr. Boral," the firm said in the statement. "Both Mr. Rallo and Mr. Boral are pleased to put their dispute behind them and move forward with confidence that their new, separate business ventures will be successful."
Criminal Probe
The resolution of their suits may not be the end of legal troubles for Rallo. In its suit, EF Hutton revealed that Rallo was the subject of a federal criminal probe.
It's not clear what the investigation, which may not result in charges, is focused on. In his suit, Rallo claimed Boral pressed him to reveal details of the government probe.
In a Monday statement, Rallo lawyer Seth DuCharme addressed the criminal probe, saying Rallo was served "a search warrant to obtain limited information" as "a routine investigative step" by the government.
"We have no indication that Joe will be charged with a crime," DuCharme said.
The dispute drew attention to the re-emergence of EF Hutton, which was founded in 1904 and became one of the largest U.S. retail brokerages. In the 70s and 80s, it was known for an ad campaign that proclaimed, "When EF Hutton talks, people listen."
