Advertisement

CALIFORNIA / News and Insight on Business in the
Golden State

Cruttenden Roth Founder Steps Down as Chairman

November 12, 1998|JOHN O'DELL | TIMES STAFF WRITER

Cruttenden Roth Inc., one of California's largest regional investment bankers, said Wednesday that founder and Chairman Walter Cruttenden III has resigned and that a former Hambrecht & Quist executive will become president and chief operating officer.

Patrick J. Allen, whose resignation as chief financial officer at San Francisco-based Hambrecht & Quist was announced Tuesday, will join Cruttenden next month.

Byron Roth, Cruttenden's president since the beginning of 1994, will become chairman and continue as chief executive.

The changes, including Cruttenden's departure, end a management restructuring that began several years ago, Roth said. Cruttenden, 48, who retains an 18% stake in the company, plans to start his own venture capital firm, investing in start-up businesses.

Roth, 35, characterized Cruttenden's resignation as voluntary and amicable. Cruttenden, who founded the firm in 1977, said he has been "phasing out" of the company since selling half his interest to Irvine-based Fidelity National Financial Inc. earlier this year.

Allen, 36, is a former Cruttenden Roth executive, having served as the company's chief operating officer from 1993 to 1995.

The firm specializes in finding and developing so-called micro-cap companies--those with capitalization of between $25 million and $250 million--and taking them public.

In 1997, Cruttenden Roth was involved in 23 public offerings and was lead manager on eight initial public offerings for firms it was shepherding through the early growth stages.

This year the company has been involved in 13 offerings, including lead manager roles in six of them, through June 30, but has taken only one company public in the second half of the year as the market for IPOs cooled dramatically.

Cruttenden has been criticized by some investors for being too lax in its choice of companies to promote. Last year, it underwrote the initial offering of Irvine-based Aviation Distributors Inc., which has since settled three shareholder lawsuits alleging that its top officials had falsified sales figures to boost the stock price.

Advertisement
Los Angeles Times Articles
|
|
|