By Echo Wang

NEW YORK EF Hutton, the small investment bank that arranged a deal for the stock market listing of Donald Trump's social media venture, is dominating initial public offering (IPO) league tables as companies hold back on big deals handled by major Wall Street banks.

The New York-based bank, which launched in its current form three years ago, has been crowned the most prolific IPO underwriter by deal volume by Dealogic for three of the last four quarters, including the first quarter of 2023.

Traditional IPO powerhouses, on the other hand, such as Goldman Sachs Group Inc, JPMorgan Chase & Co Inc and Morgan Stanley, have struggled to make it even in the top five of the league tables in the past two quarters.

This is because EF Hutton specializes in advising shell firms called special purpose acquisition companies (SPAC) that are used to list in the stock market through a merger, as well as other small companies that become penny stocks.

SPACs have fallen out of favor because of their poor overall financial performance and regulatory scrutiny, and their IPO volume is now a fraction of major IPO deals. Yet the absence of the latter, during a persistent bout of market volatility, has made SPACs and penny stocks the main driver of stock market listings.

EF Hutton helped companies raise $231 million in IPO proceeds in the first quarter, according to Dealogic. In the fourth quarter of 2021, the last quarter before Russia's invasion of Ukraine and rampant inflation triggered a major slowdown in the IPO market, the top underwriter, Bank of America Corp, had helped raised more than $5 billion.

EF Hutton, Goldman Sachs, JP Morgan, Morgan Stanley and Bank of America either declined to comment or did not respond to requests for comment.

EF Hutton, founded in 1904, became one of Wall Street biggest brokerages before slowly falling apart in the 1980s and 1990s following a series of financial scandals and mergers. It was resurrected as a brand by KingsWood Holdings Ltd, a London-listed investment firm, which acquired the rights to the EF Hutton name in 2021, about a year after the investment bank was launched.

One of EF Hutton's most famous deals was leading the IPO of Digital World Acquisition Corp, the SPAC that went on to agree a $1.25 billion merger in 2021 with Trump Media & Technology Group. The deal has been held up by U.S. regulators scrutinizing it, and its future is in doubt.

(Reporting by Echo Wang in New York; Editing by Richard Chang)