September 30, 2001, 'Victimized company tries to get on with business,' Chron.com - Houston
By Maureen Fan, Knight Ridder Tribune
Sept. 30, 2001, 12:23AM
NEW YORK -- Cantor Fitzgerald was an awesome powerhouse, the world's largest electronic marketplace for municipal bonds, a place where billion-dollar deals were part of the daily grind.
Huge and aggressive, Cantor was a monster towering above Wall Street.
At 8:45 a.m. Sept. 11, against a terrifying backdrop of smoke and flames, the firm was transformed into something quite different: a humbled and fragile family, thrown together by fate.
Many firms in the World Trade Center suffered casualties that day.
But Cantor Fitzgerald was decimated. Losing about 700 people, or more than two-thirds of its 1,000 U.S.-based employees, the company has begun a grueling corporate catharsis.
Suddenly vulnerable, the firm that had reigned supreme in the intensely competitive, trillion-dollar world of U.S. Treasury bonds is now forced to adopt a gentler character as it goes about the business of commemorating its dead.
"We need to survive for our employees, and take care of more than 700 families who have lost their loved ones," said David Kravette, a managing director with the firm, who was in the lobby of the north tower when the first plane hit. "At the same time, we're fighting for our lives. The competition is trying to eat our lunch as we speak."
Those Cantor employees who remain behind are now engaged in a struggle for survival in a hard-charging business where margins can be razor thin and the stakes are now heartbreakingly high.
"We can handle the work we're getting," said Peter DaPuzzo, co-president of equities. "But we're hoping and praying that we take care of the families."
The company's lost members are still entertwined with the living. The face of Eddie Schunk is plastered on fliers all over Manhattan. When his wife, Lisa, walked into a Cantor family-support center set up in the grand ballroom of New York's Plaza Hotel, she was overwhelmed by a wall of photographs of missing employees.
"I'm not giving up on my husband," she said. "But I know wherever he is, he's with everybody else at Cantor."
It is an extended family of survivors and victims, superstar traders and blue-collar contract workers, widows and wonder boys, fatherless teen-agers and stunned executives who must go on, knowing their company will never be the same again.
Cantor had gleaming offices on the 101st, 103rd, 104th and 105th floors of One World Trade Center. There were spectacular views of New York Harbor and the Statue of Liberty, but not many had time to take it all in.
Most of the staff, along with 1,300 other employees in offices around the globe, worked long hours matching up buyers and sellers of all kinds of financial instruments, from short-term corporate bonds to U.S. equities to long-term Treasuries.
No one does more volume than Cantor: It controls as much as 75 percent of the government-securities market.
One of the most valuable services Cantor provided to big institutional clients like banks and insurance companies was the ability to trade anonymously, selling off or buying millions of dollars worth of bonds without alarming others in the market.
It was always a cutthroat business, where type-A colleagues competed on the golf course with the same intensity they did at work.
"It's a funny group of people in the sense that they're hardened," said Peter Ryan, a managing director at Credit Lyonnais Securities.
"It's a tough business and you have to have a thick veneer to survive in that environment."
Cantor was good at it, in part because its proprietary E-Speed technology was legendary in the trade.
The company's backup system in Rochelle Park, N.J., kicked in almost immediately after the attack and would have continued to hum if bond trading had not been suspended. Two days later, Cantor's electronic-broker system was up and running an hour before the bond market cranked up again, thanks to the all-night efforts of the company's surviving technology whizzes.
Now, despite unspeakable grief for their friends and relatives, and the logistical nightmare of rebuilding the offices in other locations, Cantor has moved ahead aggressively. New hires have been brought in. Former employees have returned to help out. And the company has set up emergency offices all over the area.
Balancing compassion with the need to get on with business has been difficult. Cantor was criticized for cutting off salary checks three days after the attack. And although it has continued health insurance for the coming year, Cantor capped its life-insurance payments at $100,000 -- for some families, far less than the expected payment of twice an employee's salary.
And it's been tough to carry on. Many have lost relatives and lifetime friends. Their days are a frantic mix of memorial services and making money.
Those who survived made narrow escapes. Small things saved them: a crying infant, a traffic jam, a few extra moments with the kids before heading out the door.
For Kravette, a 40-year-old father of two, it was his pregnant secretary and a visitor without identification.
Instead of sending his secretary, Kravette caught an elevator down from the 105th floor to meet clients in the lobby.
"I was trying to be the nice guy," Kravette said.
He emerged in the lobby, slightly aggravated at the inconvenience.
"Which one of you knuckleheads came without an ID?" Kravette recalled asking, just as a tremendous explosion shook the six-story lobby.
"I saw a couple of elevators in free fall; you could hear them whizzing down and as they crashed, there was this huge explosion, like a fireball exploding out of the bank of elevators," Kravette said. "People were engulfed in flames."
He escaped across an overpass to the West Side Highway. Three Cantor employees in the lobby suffered severe burns but will survive. His pregnant secretary is missing.
Others suffocated in thick black smoke in the skyscraper's stairwell as they tried to make it to the roof. Several made phone calls or were in the midst of conference calls, managing to tell clients and family members they were trapped.
Others, like Jack Lanzer, 30, were on vacation. With their car packed, he and his wife lingered in the city so they could vote in the Sept. 11 mayoral primary.
"The first week I was a mess. Whenever I stop to think about it, tears come to my eyes," said Lanzer, a member of the equities-trading support staff. "Everybody's lost friends up there. I had an uncle up there, and he was getting married next month."
Cantor Fitzgerald was not the only hard-hit firm, but few were as tightly knit. A private partnership, the firm often hired the friends and family of existing employees.
"This is such a close-knit firm, the salesmen usually knew the color of their client's houses," DaPuzzo said.
"We have many sons of standing members of the Security Traders Association working for us," he added. "Nepotism makes our industry work because we know that if the father or mother is good, you know the son or daughter is good in this business."
Now their names make up a list haunting in its personal detail.
It includes derivatives brokers and commodities traders, Web-site designers and payroll personnel, even the firm's general counsel. These were longtime baseball and hockey coaches, proud mothers and fathers, devoted parishioners and golf champions, village trustees and newlyweds.
Kerri Roberts, 36, hasn't yet been able to mourn for her younger sister, Kristine Swearson. She's been too busy gathering up the 34-year-old's antique china, collecting her books on French literature and extending the rent on Swearson's Upper East Side studio for a month or so. "Being here with her things makes me feel closer to her," said Roberts, a marketing administrator at FileMaker. "I'm kind of looking forward to going home so that I can cry."
Like Kristine Swearson, many were just breaking into the prime of their lives.
Now they are survived by parents like Geraldine Shaw, a receptionist from Princeton, N.J. She lost her 42-year-old son, Jeffrey.
"We're hoping we'll find some part of him," she said, sobbing, "so we can put closure to this."
Although much is made of the family-like nature of Cantor Fitzgerald, it was, and still is, a hard-nosed business. Nearly 500 people had lost their jobs before Sept. 11, and 300 more were about to be axed, made obsolete by the success of their electronic bond-trading network, DaPuzzo said.
The reliance on that technology is a key reason Cantor survived.
In a small office in Darien, Conn., an hour north of Manhattan, surviving employees try to stay focused and continue to rebuild.
Before Sept. 11, the room held about 20 people. Now it's crammed with more than 40 traders who make up the heart of the firm's equity division, or what's left of it. Cantor lost 130 of its 280 worldwide equities employees. Other departments were destroyed. More than six dozen market makers in the international, Nasdaq and program-trading groups were lost.
In the over-the-counter Nasdaq department, one woman who survived was scheduled in December to marry another Nasdaq trader, but he was killed in the attacks.
But everybody is doing his or her part. Traders in Cantor's London offices, who used to go home when the New Yorkers reported to work, are doing double duty, staying until 9 or 10 p.m.
Phil Marber, the other co-president of the equities division, is optimistic.
"I think the whole Street wants to see us survive. It's a competitive business, but I don't think anybody wants to see anybody go out like this."