When the airplanes hit the twin towers of the World Trade Center one of the hardest hit firms was a firm which was making money as a bond trader – Cantor Fitzgerald occupied floors higher than where the planes hit and lost many of the people who made money for the firm. In a book called on top of the world – Cantor Fitzgerald, Howard Lutnick & 9/11 – A History of loss and renewal by Tom Barbash published by HarperCollins books, NY, 2003.

In the financial services industry the biggest asset is your people for over the years they have built relationships with other people and institutions and there is a high degree of trust factor. Although everything is recorded, trades were done when people say agreed and billions of dollars moved between firms. In the bond business, it was essentially unregulated and Cantor stepped in to ensure institutions could trade bonds and knew what the prices were. The firm bought and sold the bonds, trying to remain with no inventory and would make a little money on the transactions. Given the market was in the billions, those fees provided upper income lifestyles to those who worked in the firm. With Cantor, there was an element of trying to hire the best on the street and bringing in family members to work. The result was many people spent their off hours together, particularly where family is involved. In early 1990’s the World Trade Center was a target of a bombing but within a few days, things were back to normal, this gave the firm the expectation they could regroup if something was to happen.

When 9/11 happened, besides the people there was a very real possibility the firm would not open – in the financial services industry it is about the credit which the firm has at the banks. Losing your credit is losing the ability to operate. Cantor as a firm was the biggest firm in bond trading, if it did not open its competitors would step in and they would never regain their prime position. This meant many long hours – using multiple locations, high learning curves to get the firm up and ready. It also meant dealing with people who wanted things to be back to the way they were September 8th.

Linking to dividend paying stocks, in the case of Cantor it is a partnership company however the process speaks to backup plans and crisis management. The easier aspect is getting the company up and working, the harder part is dealing with the expectations of people and everyone comes from a slightly different perspective. In Cantor’s case, the firm said they would take responsibility for the families, but what did that mean? did that mean everyone is still on the payroll? is the paycheque still coming in? Given the firm was worried it might or might not survive and the need to recreate all the files for the firm time needed to pass, for others they wanted less time and a conflict would play itself in the press. Cantor’s case is the same for all firms – time expectations for things to happen is what needs to be planned for and remember people are people.

There are more questions than answers, till the next time – to raising questions.