Brass-knuckled deals and stiletto insults are prized in normal times on Wall Street. And by all accounts, Howard Lutnick of Cantor Fitzgerald fit that world perfectly, edging out his rivals at other bond trading firms and grabbing profits with the best of them.
But since Tuesday morning, Lutnick's open affection and tears have softened his flinty image and shown how a leader can find a new voice to get his firm and the nation's markets up and running again.
Last Tuesday morning, more than 600 of the roughly 1,000 men and women who worked in the New York offices of Cantor Fitzgerald vanished in the pillar of smoke and fire that consumed the World Trade Center.
PHOTO: NY TIMES
By 7am Thursday, Cantor's survivors -- led by Lutnick, who had been out of the office only because he was taking his son to school -- had reopened the electronic bond trading network, called eSpeed, that makes this small, specialized firm such a critical link in the nation's Treasury markets.
"I did not make the decision to reopen," an exhausted Lutnick said on Thursday. "I interviewed a broad range of my staff and that is what they wanted to do." In part, they simply "were not going to let somebody defeat them," he said. But much stronger was the conviction that the firm has to survive and prosper because so many bereaved people are now depending on it.
His voice breaking, he added: "We have a new class of partners here -- these families. I have to take care of these families."
Commitment to the victims
Cantor managed to reopen for business so quickly among such anguish and loss through a combination of luck -- some of the most crucial people survived -- resiliency, commitment to the victims and leadership by Lutnick.
Some key technology department employees were meeting outside the office on Tuesday, and a few others had slept in after working late the night before. Since the disaster, about 50 employees have converged at the company's bunker-like backup computer facility in Rochelle Park, NJ, 37km from the destroyed towers. They have worked almost around the clock, napping on floors, to weld an electronic bridge over the gaping hole in the firm's computer systems.
The backup facility was set up after the 1993 terrorist attack on its home office, and the firm more recently arranged a second backup link through its London office.
But the critical ingredient, Lutnick insisted, was the conviction among the stricken survivors that the best way to help the widows and families so suddenly left in their care was to keep the firm alive and profitable.
Lutnick, 40, says he is not leading the Cantor employees in the company's revival. "There is no such thing," he said. "All I can do is follow."
Lutnick might not seem a likely candidate for such nurturing leadership. During his tenure at the scrappy, sometimes sharp-elbowed firm, regulators have more than once accused Cantor of cutting too close to the edge of market rules. He consolidated his claim to the chairmanship in a bitter battle with the widow of his mentor, B. Gerald Cantor, the colorful founder of the firm who died in 1996.
Before that fight was settled, lacerating insults had been hurled into court by both sides and Wall Street was trading gossip about what some saw as Lutnick's insensitive treatment of Cantor's grieving wife.
But Lutnick is not being cited for insensitivity now -- certainly not by the anguished relatives gathered in the lavish family service center he established in the second-floor ballroom of the Pierre last Wednesday.
Black-clad volunteers stand at the head of the approaching staircase to provide directions and ensure that no uninvited reporters or photographers intrude on the families' privacy. Other volunteers are staffing a phone bank and a computer center. There are private, curtained alcoves where grief counselors can work. Food and beverages are constantly replenished. A large television at one side is tuned to news of the rescue efforts, and a stretch of the room's soft greenish gray paneling is papered, floor to ceiling, with makeshift fliers seeking information about missing employees.
Atop four of the dozen or so tables, on the slim metal stanchions that usually hold table numbers at a large banquet, are signs reading "Floor 101," "Floor 103," "Floor 104," and "Floor 105" -- the Tower One locations where missing employees once worked.
Their relatives, gathered around the tables or drifting outside, have commended Lutnick for immediately providing his home telephone number and encouraging people to call. "He's a very nice man, and very understanding," said Michele Rosenberg, whose son Lloyd is missing. "I've called him five times and gotten through every time."
Richard Breeden, a former chairman of the Securities and Exchange Commission and a director of eSpeed, said that Lutnick has always seemed warm and caring among his families and his employees, "but that's a side of the person that his competitors on Wall Street haven't seen as clearly. To some degree, they're seeing now the true Howard, and to some degree the searing experience the entire Cantor family has been through is bringing out the best in him."
Losing a brother
Lutnick's own family is among the bereaved. His 36-year-old brother, Gary, made a telephone call Tuesday morning to family saying he was "stuck in a corner office, and that it was really black and really bad," Lutnick said, brushing at his tears. Among his last words he acknowledged, "I'm not going to make it."
Howard Lutnick was spared, he said, because he had taken his five-year-old son to his first day of "big-boy school" on Tuesday and arrived at the World Trade Center just as the terrorist attack began.
Standing by one stretch of doors, he asked fleeing workers to call out their floor numbers, hoping to hear that people from the uppermost floors had made it down. But just after he heard someone call out "91," the second tower began to collapse with an awful groan "like a jet engine right in my ear" -- and he had to flee for his life. After escaping from the smokestorm, he began to walk. At some point, he passed a bank of pay phones where people were queued up. Dazed, he walked up to the man using the phone and, apologizing, simply took the receiver to call home. Only then did he learn that Stephen Merkel, Cantor's general counsel, had also made it out safely -- because he had been descending in an elevator from the upper floors but had not yet reached the lobby when a fireball of jet fuel scorched through it.
Armed with that news, Lutnick walked on -- 44 blocks in all -- to Merkel's home. Another survivor was found, David Kravette, 40, who had gone to the lobby just before the attack to escort a visiting customer through the security checkpoint. Together, they walked more than 3km to Lut-nick's apartment in Upper East Side and immediately began making and receiving calls to try to trace missing workers.
By Tuesday evening, only 68 people were safely accounted for, he said. The next day, the list grew to 270. It now has some 350 names. So far, none of the people on the list are believed to have escaped from Cantor offices after the plane hit.
By Wednesday, Cantor's London offices, which employed 750 people had become the firm's lynchpin, led by Lee Amaitis, chief executive of Cantor's international operations.
Stunned and sleepless
But everyone in that faraway office was stunned and sleepless. The London staff, housed in the financial district in a building called 1 America Square, had gone into action even before Lutnick managed to reach them. They prepared a page to post on the Web, listing telephone numbers for families and surviving employees. The London office of Cantor's public relations firm, Edelman, set up a bank of people to field calls from the news media and relay queries to Edelman staff in New York.
By Wednesday, pressure was building from the Federal Reserve to reopen the market. Dozens of government regulators, brokerage firms and other key players such as Cantor participated in a morning conference call to discuss whether or not the markets were ready toopen. One question hung in the air: Would Cantor's systems be prepared?
Alongside the human tragedy, the needs of the bond market and its regulators did not loom large in his priorities, Lutnick acknowledged. "Someone from the Treasury or the Federal Reserve made the comment that they preferred an open market as a sign of strength," Lutnick said. "I didn't care. I mean, the stock exchange wasn't open. I asked my staff, `Why should we open?' I told them I didn't want any bravado. `Don't try to impress me.'"
But his staff, galvanized to protect the firm's valuable franchise for the good of its dependent families, quickly assessed what needed to be done. Fate had spared the executives who could knit the London computer system to the New Jersey system and allow the firm to provide the critical documents needed to conduct business.
On a second conference call that began at 2pm, the Bond Market Association decided that bond trading could resume Thursday in a shortened session -- largely because Cantor's computer systems were ready.
Besides its own efforts, Cantor was added in its revival by helping hands from elsewhere in the business world -- cooperation that executives say will be an essential lubricant for Wall Street's reconstruction.
No one made it out
On Tuesday, Lutnick got a call from a childhood friend, Arthur Bacall, an executive at the Pierre Hotel, who offered to help in any way. "I called Arthur back and said `I need your hotel -- give me your banquet room to take care of all these people, '" Lutnick recalled.
The family services center at the hotel opened its doors by 2:30pm on Wednesday and remains open from 9am to 9pm. Among the volunteers are people from the Intrepid Museum, where Lutnick is a board member.
On that first day at the Pierre, Lutnick made an emotional appearance dressed in a black suit, sharing hugs and weeping openly. Rumors about rescued Cantor employees had all turned out to be untrue, he bluntly told the families. No one from the floors had made it out. The three Cantor employees who were in critical condition in hospitals were almost certainly on lower floors when the plane hit.
But Lutnick encouraged them to hold on to tendrils of hope if they needed it. Tuesday night he had heard his brother was at an area hospital, a rumor which later turned out to be untrue.
"But you know what? I liked it," he told his audience. "The odds of finding him are maybe one in a million. It may be a miracle, but I'll take a miracle any day."
As Bacall helped shelter the Cantor families, securities lawyer Christopher Jensen of Morgan, Lewis and Bockius, found room in his firm's New York offices south of Grand Central Station for a command center for Cantor's executives.
He praised the work of CNA, which had provided the life insurance coverage for Cantor employees, is considering treating the deaths as accidental, "to double the benefits for everybody," Lutnick continued.
To be sure, for some of the people who dealt with Lutnick last week, "it was just business," he said. "It always surprised me when I'd be announced joining the conference call, and nobody would even say, `Howard, I'm so sorry.' But I understand -- they're all focused on the business."
By Thursday evening, Cantor and eSpeed were up and running. Sales executives from branch offices in Boston, Chicago and Los Angeles were calling institutional customers to say they were back in business. The system continued smoothly through Friday's trading.
And he would be willing to talk about that at great length, he told a reporter on Thursday night, on one condition: That the story include news about the creation, that same day, of the Cantor Fitzgerald Foundation to aid the families of anybody who died in Tuesday's disaster, no matter where they worked. For now, the foundation will be housed at 101 Park Avenue.
"I am donating US$1 million to the foundation," Lutnick said. He added, almost apologetically, "I want to give more -- we all do -- but we don't know yet whether we will be able to. That depends on how our business goes from here on."
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