The companies declined to disclose terms of the sale. Taft also said it is too early to say whether job reductions or management changes will result from merging the two firms. George M. Ferris Jr., Ferris' chairman, and Roger Calvert, its chief executive, declined to comment, a spokeswoman said yesterday.
George Ferris, who is 80 and owns about a quarter of the firm's shares, signaled the end was near in September when he told The Sun that at least four rivals were showing interest in a deal. The revelation came amid fallout from the stock manipulation scheme first disclosed in February 2007. The incident cost three executives their jobs and exposed Ferris to a lengthy federal investigation with an uncertain outcome. It remains embroiled in a legal tussle with victims of the fraud, who are still considering the firm's offer last month of more than $16 million in cash and stock to settle the matter.
Since then, an emerging bear market and potential recession have further weakened prospects for small brokerages, analysts said. The problem is especially acute for Ferris, which has stood still as others merged, invested in technology, embraced electronic trading and adapted to an industry landscape that favors bigger firms.
"People don't want to do deals, there are no IPOs and people are trading less, so there's just more stress and strain on everybody large and small," said Sanford Bragg, president of Integrity Research Associates, a New York financial services consulting firm.
Business officials lamented the loss of another Baltimore-bred firm but expressed hope that Dain Rauscher will maintain the same level of civic involvement as Ferris.
"We certainly are very proud of the homegrown companies that we've had in Baltimore ... but at the same time I think it [the sale of Ferris] is probably a natural consequence of this global economy that we're dealing with each and every day," said Donald C. Fry, president of the Greater Baltimore Committee.
Though its official headquarters is in Washington, the firm is chiefly associated with Baltimore, where most of its top executives and trading operations reside. Its predecessor, Baker, Watts, was founded in Baltimore and remained independent until lean times precipitated its merger with Washington-based Ferris & Co. in October 1988.
George Ferris brought with him a reputation as someone who ran a tight ship. And he was steadfast as competitors rushed to the Internet and bulked up through acquisitions.
