- The Washington Times - Wednesday, May 1, 2002

Howard Lutnick was one of the most powerful men on Wall Street, with an empire of about 1,000 employees on five floors in World Trade Center Tower One. Then at 8:45 a.m. September 11, the company lost every person who was in the office: 658 workers.
But the chief executive of one of the world's largest bond-trading firms was determined to rebuild Cantor Fitzgerald and take care of the victims' families and their nearly 1,500 children.
So far, with a smaller staff, new offices, one less database, several fewer products and lots of grief, he is doing both.
"It's with profound purpose and commitment that we come to work each and every day persevering to provide support to the families of our friends and colleagues who gave so much," Mr. Lutnick said. "It's what drives us, what keeps us focused and what keeps us going."
Cantor Fitzgerald, whose offices were on floors 100 through 105, was the hardest hit of all the World Trade Center tenants. The company lost everything housed there, including nearly three-quarters of its New York staff.
Among the victims were Mr. Lutnick's brother, Gary, and Fred Varacchi, who created and ran ESpeed Inc., an online-trading company that was spun off from Cantor in 1997.
Mr. Lutnick was taking his son to school when the first plane hit World Trade Center Tower One.
"Besides the CEO, the whole executive management team is new," said Richard Repetto, an analyst with Putnam Lovell Securities. "So the company has changed tremendously from a personnel standpoint."
Fifty-seven of the 60 brokers on the corporate-bond desk were lost; 14 of the staff who traded stocks or provided back-office support survived. With a majority of the U.S. Treasury bond brokers lost during the attack, the firm decided not to rebuild those divisions.
"Cantor Fitzgerald promptly returned to the Treasury markets; however, they were hampered in some of their products [that] depended on the voice broker," said Ron Purpora, co-CEO of Garban Intercapital's North American division.
Garban is one of three top companies in the bond-trading business with Cantor and BrokerTech, a consortium of major investment banks such as Goldman Sachs and Merrill Lynch. The firms, which buy bonds from the U.S. Treasury and resell them to investors, remain in a constant struggle over market share.
"We in the intercapital world like to think we're a big, global group," said Rose Higgins, who works in the human resources department of Garban. "But we're actually a small community, and something like this has a huge impact."
Before the attacks, Cantor Fitzgerald employed about 2,300 people in numerous offices throughout the United States, Europe and Asia. Of the employees it lost in New York, the firm has replaced about 425, but it continues to hire daily.
Another major change at Cantor is the perception of Mr. Lutnick. Before September 11, he had been regarded as insensitive, and insiders thought of the company as a bully, though a respected one.
Mr. Lutnick's reputation as cold stemmed from the way he wrested control of the firm from the dying Bernie Cantor in 1996, two days after the company founder was placed on life support. Mr. Cantor's widow banned Mr. Lutnick from the funeral.
Although Cantor and ESpeed took large hits after September 11, they posted profits in the last three months of the year, which allowed them to give money to the victims' families. The October-to-December period was the first profitable quarter for ESpeed, of which Cantor owns about 52 percent.
ESpeed reported a profit of $7.8 million (14 cents per share), compared with a loss of $5.2 million (10 cents) a year earlier.
Combined with Cantor's profits, which aren't disclosed because the company is privately held the two firms were able to pay nearly $5 million in aid and health care to the families of lost employees. That money is the first payment in a fund that Cantor set up two days after the attacks, in which it pledged a quarter of its profits over the next five years to the families.
"The days immediately after 9/11, our focus was to learn the whereabouts of any surviving employees and to set up communication channels," said Cantor spokeswoman Amy Nauiokas. "We also, with a handful of survivors in the New York offices, had to get the business back and running."
The shaken, surviving staff moved to a Cantor office in Connecticut and into temporary offices in the city donated by Swiss investment bank UBS Warburg.
The bond market reopened Sept. 13, and ESpeed was available online to buyers and sellers. The technology never failed, because the firm built two data centers in New Jersey and London after the bombing of the World Trade Center in 1993. These were rotated regularly with the New York data center, so the London data center automatically took over September 11 without disruption.
Cantor has since moved back to New York, to five floors of a 32-story tower on Lexington Avenue.
A striking aspect of the days after the attacks was how clients waited for Cantor and other brokerage firms to recover. Cantor's status as one of the Treasury's main traders was helpful, but numerous other customers waited for it to come back.
"I think, given the situation, believe it not, many of the clients wanted to do business with them, so they gave them a lot of leeway to get back up and running. They didn't want to take their business away because of what happened," Mr. Repetto said.
By killing almost all of Cantor's voice brokers, the attacks speeded the process of converting to electronic trading through ESpeed.
"Prior to 9/11, they were pretty much intertwined," Mr. Repetto said. "Cantor had the voice side of it, so if a broker had to call Cantor, the voice guy could just enter the information into ESpeed's system. That's all disappeared now."
The two companies are more separate than ever, even though Mr. Lutnick has been CEO of both since the attacks.
Mr. Lutnick is writing a book about the ordeal, expected out later this year.
"I think the face of Cantor has changed," Mr. Purpora said. "But there were few customers or brokers who were unaffected by September 11. We all are, in various degrees, building up our businesses."

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