THE VIRGINIAN-PILOT 
              Copyright (c) 1994, Landmark Communications, Inc.

DATE: Thursday, December 22, 1994            TAG: 9412220508
SECTION: BUSINESS                 PAGE: D1   EDITION: FINAL 
SOURCE: BY TOM SHEAN, STAFF WRITER 
                                             LENGTH: Medium:   52 lines

SO FAR, KIDDER HAS TURNED BACK EFFORTS BY COMPETITORS TO HIRE ITS STOCKBROKERS

Despite aggressive efforts by rival firms to lure away its stockbrokers, Kidder, Peabody & Co. has held onto the 26 brokers in its Norfolk office.

Kidder has been struggling to keep its brokers since PaineWebber Group Inc. agreed last October to buy most of Kidder's operations from its parent, General Electric Co., for PaineWebber stock valued at $670 million.

Within weeks of its agreement with GE, PaineWebber filed lawsuits against Donaldson, Lufkin & Jenrette Securities Corp. and Dean Witter Reynolds Inc. to prevent defections of Kidder brokers to those firms.

``PaineWebber has done a good job of holding the dike for a while,'' said an officer at another brokerage firm in Hampton Roads.

But PaineWebber has had to sweeten its package of incentives to satisfy many of Kidder's brokers, the officer said.

Throughout the country, brokers with Kidder have been courted aggressively because many could bring with them significant amounts of business.

In Norfolk, ``each one of them has two or three places where they could go tomorrow morning,'' said the officer with the rival brokerage firm.

``There is a lot of interest in their brokers. They have some high-powered guys over there,'' said anotherstockbroker in Norfolk familiar with Kidder's local office.

Kidder's Norfolk office occupies most of one floor in the NationsBank building on East Main Street. Nationwide, the firm has 1,100 brokers and 50 offices.

PaineWebber, a much larger firm, has 283 offices in the United States and 5,450 brokers. This includes 17 brokers at its World Trade Center office in Norfolk and 11 at an office in Virginia Beach.

Kidder, which was acquired by General Electric in 1986, has focused its attention on serving the needs of individuals with high net worth. However, the firm's image was tarnished during the late 1980s by insider-trading scandals, and this year Kidder was badly bruised by a government bond-trading scam and heavy losses on its portfolio of mortgage-backed securities.

Last Friday, PaineWebber took control of certain Kidder operations, including its investment banking, equity research, municipal finance businesses. PaineWebber said it will take over Kidder's retail brokerage business by the end of January.

However, plans for consolidating Kidder and Painewebber offices that overlap have not been completed, a PaineWebber spokesman said. Also, PaineWebber has not yet decided whether to jettison the Kidder, Peabody name or to keep it, the spokesman said. by CNB