David Paul Kane; Flamboyant Stockbroker
David Paul Kane, a colorful former lobster importer and carwash owner who made a fortune in the discount brokerage business as founder of the aggressively advertised Kennedy, Cabot & Co., died Tuesday at his home in Century City after complications from a stroke. He was 82.
Named after John F. Kennedy to appeal to upscale Democrats and Henry Cabot Lodge to lure Republicans, the Beverly Hills-based firm had no Kennedys, Cabots or Lodges on its payroll. The name was one of Kane’s canny ploys to build a successful business, along with his stock market commentaries that ran for two decades on local KWHY-TV, Channel 22, and full-page newspaper ads that featured his visage and blared the benefits of a firm he was proud to call the brokerage industry’s bargain basement.
“We’ll meet or beat any price,” proclaimed the ads, which ran in this newspaper and in regional editions of the New York Times and the Wall Street Journal.
The Cal Worthington of the brokerage business, Kane relished needling his competition. In 1992 he offered commission-free trades to customers who switched their account from his three largest rivals--Charles Schwab, Fidelity Investments and Quick & Reilly. As an added incentive, he promised those who made the leap a free share of stock in Schwab or Quick & Reilly, which were publicly traded companies. Kane said he made the offer “just to aggravate the devil out of the Big Three.”
He was a staunch supporter of Judaism and often said he was in the brokerage business to support his schmaltzy television variety show, “The American-Jewish Television Hour,” which ran for many years on cable stations in Beverly Hills and West Los Angeles. Milton Berle, Bob Newhart, Lucille Ball and Don Rickles were among his guests.
A Boston native, Kane came to Los Angeles after serving on a U.S. Navy oil tanker in World War II in the Pacific theater. He attended the famed Boston Latin High School, then Northeastern University and Harvard, although he did not earn a degree.
After the war he imported Maine lobsters to Southern California. In 1949 he bought a carwash, gas station and auto parts business at Manchester and Western in Los Angeles and called it Kane’s Korner.
He eventually sold that business for a healthy profit and retired to live the life of a footloose, wealthy bachelor. For several years he called the Beverly Hills Hotel and southern France home.
In the late 1950s he dabbled in the nightclub business. Then, in 1960, he opened Kennedy Cabot.
He said he started the firm to sell Israeli bonds and fight communism. “If someone owns even one share of IBM,” he told an interviewer in 1989, “I don’t believe they will become a communist. That’s why I like to make it so cheap to buy stock.”
He turned Kennedy Cabot into a discount brokerage in 1975 when brokers’ commissions on stock market trades were deregulated.
Despite its upscale address, Kennedy Cabot occupied rather shabbily furnished offices on Wilshire Boulevard in Beverly Hills. The carpets were old and spotted, the curtains sagged from age, and Kane sat at a desk made of particle board. His frugality extended to his abode, a $946-a-month rent-controlled apartment on Rodeo Drive where he lived for 20 years.
He once told the Los Angeles Business Journal that he was not in the brokerage business to make money. But he clearly enjoyed the trappings of wealth. He drove a Jaguar and for years ate lunch almost daily at the No. 1 table at the Bistro Garden, a posh Beverly Hills restaurant.
His personal extravagance got him into legal trouble in 1988 when he was sued by a former partner, Hawaiian investor I. Michael Kasser, who said Kane drew an excessive salary of $60,000 a month, gave himself extremely generous “creativity bonuses” and saddled his expense account with such dubious charges as trips to Catalina, pajamas and underwear. When a judge ruled in Kasser’s favor, Kane found an investor who bought out much of his and Kasser’s stakes in the company.
Kane finally sold the rest of his interest in the firm in 1997 for $155 million to Waterhouse Investor Services Inc., the New York brokerage arm of Canadian banking giant Toronto-Dominion.
At the time of the sale, Kennedy Cabot served 140,000 clients through 14 offices in California and one in Seattle.
Kane continued to rise before dawn to prepare his daily market commentary on KWHY-TV. He often sprinkled his commentaries with Yiddish, telling “alta-kockers”--old fellows--not to shy away from the stock market. He also injected the spots with his own brand of humor, as in “Check out that new Mexican phone company--Taco Bell.”
Kane is survived by sisters Gertrude and Frances Cohen, nieces Geraldine Wolfe and Louise Cohen and nephew Lawrence Cohen.
Funeral services will be held at 11 a.m. today at Pierce Bros., 1218 Glendon Ave., Westwood.
