ANYONE OLD enough to remember the heyday of E. F. Hutton remembers their ad, “When E. F. Hutton speaks, people listen” in which entire city blocks fell silent to hear the pearls of financial advice spoken by in whisper by a Hutton client. Chief Executive Officer Robert M. Foman was so enamored of Hutton's image that he built a 29-story, $100 million headquarters in Manhattan, New York City, that some people called a memorial to corporate greed.

People stopped listening to Hutton, however, after discovering that the company had been engaged in a systematic effort to avoid paying interest on short-term bank loans through a complicated scheme of check kiting. The scheme came to light in December 1981 when Hutton gave in to the pleas of ...

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