[3] Carter, Berlind, as it was then known, initially carved out a niche as a small research boutique, though it also offered brokerage and investment banking services[4] The firm was nicknamed "the Jewish DLJ" in reference to Donaldson, Lufkin & Jenrette, a former investment banking firm acquired by Credit Suisse in 2000.

Shortly before his suspension, the other partners forced Potoma's resignation and dropped his name from the firm, becoming Carter, Berlind & Weill.

Carter, Berlind made its first acquisition in 1967, taking over Bernstein-Macaulay Inc., a well-respected firm founded by Peter L. Bernstein, that specialized in investment management.

[8][9] Arthur Carter, increasingly unhappy at the firm, sold out his stake to his partners for several million dollars in 1968 and pursued a number of personal investments in manufacturing companies.

[5] In addition to the firm's notable acquisitions, Carter Berlind, and later CBWL, was known for developing a number of future Wall Street executives.

[15] Similarly, Joe Plumeri, who later became president & managing partner of Shearson Lehman Brothers in 1990, and subsequently CEO of Willis Group Holdings, joined CBWL in the 1960s.

[3][12] Hayden Stone, founded in 1892 had a large retail network and a significant investment banking department.

However, in the late 1960s, Hayden Stone had difficulties with its administrative functions, particularly as the size of the firm had expanded so rapidly.

CBWL negotiated to acquire the bulk of Hayden Stone from its creditors including the firm's name, 28 of its branches with 500 brokers and roughly 50,000 accounts.

By acquiring Hayden Stone, CBWL launched itself from relative obscurity to become a major firm on Wall Street.

In August 1973, Marshall Cogan left the firm after disputes with his fellow partners to focus on leveraged buyouts.

[21] In 1976, after completing the integration of the two companies, the successor, Shearson Hayden Stone, made two notable purchases: Lamson Brothers & Co., a commodities brokerage founded in the 19th century and Faulkner, Dawkins & Sullivan,[22] a regional brokerage with an excellent equity research department.

[9] In 1979, Weill and the firm's successor, now Shearson Hayden Stone completed their most ambitious merger to that point, acquiring Loeb, Rhoades, Hornblower & Co. to make Shearson Loeb Rhoades the second largest investment banking firm.

With capital totaling $250 million, Shearson Loeb Rhoades trailed only Merrill Lynch, Pierce, Fenner & Smith as the securities industry's largest firm.

The two firms incurred significant costs attempting to merge their back office operations, both of which had issues prior to the merger.