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End of the 80's bond daddies.

End Of The |80s Bond Daddies

The news is that the Little Rock bond house of Allison Rosenblum & Hannahs has lost $3.4 million in its last two years of operation and is near collapse.

Direct descendant of scandal-plagued Lasater & Co., Little Rock's symbol of high-flying, cocaine-snorting bond daddies, the death of ARH is a sign that Little Rock's bucket shops as a whole are comatose.

But I'm not thinking of the news. I'm thinking of principal owner Gerald Hannahs and the $350,000 he says he has personally poured from his wallet into the company, plus the morning he called me at 6 a.m. screaming into my telephone that I should rot in hell.

A Hot Story

I covered ARH when I was a newly minted business reporter at the Arkansas Democrat in early 1989.

Unlike major "wire houses" like Paine Webber and Shearson Lehman Hutton, many of Little Rock's independent bond houses had gained notorious reputations in the mid-1980s for fast-buck operations, huge commissions and corruption.

Recognize the names of Jon Brittenum, David Collins, Jim Dale Swink, William F. Smith, Billy Charles Martindale, and Jarrell D. O'Dell?

All have either lost their licenses amidst charges of improper trading; gone to prison on drug charges; gone belly up in sensational trades; or had numerous lawsuits filed against them contributing to Little Rock's smaller bond houses' reputation for churning and burning customer accounts.

ARH's lineage made it everything I imagined a bucket shop was supposed to be. I went over one day in 1989 to talk to Hannahs, seeking information on another bond daddy, Billy McCord.

As a reporter, it was my job to cover the securities beat. That was great, because inside I was attracted to the stories of $1-million incomes, wild parties with willing secretaries in corporate jets and all the other tales from the dark side of the financial industry.

Family Feud

ARH and McCord were feuding at the time because McCord, a big hitter with big accounts that supposedly generated millions in annual revenue, had abruptly left the firm, taking his contacts with him to an investment arm of OneBank.

Hannahs didn't give me any information about McCord that day, but he did talk to me for about 20 minutes or so in a dark office whose ornate private bathroom smelled of easy money.

He told me about how he got into the major leagues as a baseball pitcher after being turned down by agents from all over, and of his years as a paper boy and his love of seeing the new front page.

We left as friends.

It wasn't long after that I got my hot story, but it wasn't on McCord.

Dan Lasater, holder of the multi-million dollar note for ARH, reportedly was pulling strings in the background-something his cocaine conviction prohibited him from doing, according to rival bond daddy Ron Loftin. Loftin said it and I wrote it. The paper ran the story on the front page and the next morning my wife woke me with Gerald's screaming telephone call.

Non-Stop Obscenities

He was pouring a stream of non-stop obscenities into my ear, and I was too shocked to do much else besides listen. For the rest of the week, I heard his voice ringing in my head as I tried to piece together what kind of world Gerald was living in and my role in it.

Now, nearly two years later, the slowing of the bond and stock markets has shaken even the strongest securities firms in the country. That, combined with state Securities Commissioner Beverly Bassett's determination to stop trading abuses and reams of bad press has sent more than one bond daddy looking to the classified pages for new employment.

For the capital city's freewheeling bond daddies, ARH's staggering gait is a sign that it's no longer the beginning of the end: It is the end.

For Gerald, whose other partners left last July, he's stuck trying to salvage what is probably an impossible situation.

For the city, and the reporters that covered it for better and worse, it's the end of an era.
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Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Inside Business; the fall of most bond house owners in Little Rock, Arkansas
Author:Walker, Wythe Jr.
Publication:Arkansas Business
Date:Nov 5, 1990
Words:686
Previous Article:Flying high in Little Rock.
Next Article:Manipulating the masses.
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