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“Civil Society and Terrorism” Closing remarks 19:00 - 14 November 2002 Madrid, Spain |
I know that terrorism has touched the lives of many of you here today. Therefore, you will understand the mixture of sadness and pride I feel standing in front of you, to tell you about how Cantor Fitzgerald and eSpeed survived the most unimaginable of circumstances. Based in London, my September 11th experience can never compare to that of my colleagues in NY, even though I lost my two best friends and people I worked every day with for years. My story and that of my colleagues in Europe and Asia is fraught with determination to keep the business running, feelings of not being able to do enough to ease the suffering of our friends’ families and inability to comprehend our own grief.
Cantor Fitzgerald is the leading inter-dealer broker for fixed income products around the world and the leading broker of equities between institutions in the third market. Its subsidiary eSpeed is the leading electronic trading platform, transacting over $200 billion worth of fixed income products every day. These two companies shared offices on the top five floors of the North Tower of The World Trade Center. The first Tower to be hit, and the second Tower to fall.
Alerted right away by colleagues following the market news, in London, we watched helplessly as the disaster unfolded on television. Because telephone or e-mail communications were lost, we continued to hope against hope but in reality every one of the 658 people - two thirds of our New York staff - who were in the office when the first plane hit at 8:45 were lost.
And so began the first 48 hours during which the survivors in NY and the employees in London and Asia snapped into action - almost automatically and without stopping to sleep for days. While we moved quickly to secure the company, little thought was given to the possibility we would not continue in business. But as the hours ticked by and the magnitude of the situation sank in, a conscious decision had to be made. Do we keep the company going or do we go home and be with our loved ones?
I am standing here today because of the unbelievable sacrifice of the 350 surviving employees in NY and over one thousand more around the world, all of whom pulled together in the most amazing way possible and enabled the company to survive our circumstances. Not just for the sake of the company, but for our lost colleagues who had made Cantor Fitzgerald and eSpeed what they were - and for their families who might need us to look after them for years to come.
We could not have achieved this alone. This miracle occurred with the help of so many individuals and companies who offered their support. Our clearing and settlement relations with Citibank and Chase, helped us to keep an uneasy market calm while we unraveled billions of dollars of transactions that would need to be settled over the coming days. In the technology sector in particular, Microsoft flew in 50 experts to help us break codes, while Cisco had 75 people helping us to reroute and reconnect our network.
But before I talk more about the aftermath of September 11th, I’ll spend a little time on an earlier experience. You may recall that in 1993 there was also a terrorist attack on the World Trade Center, a bomb blast that made the Towers inaccessible for over a week. While six people tragically lost their lives, no one who worked for us was injured. For Cantor Fitzgerald it was more immediately a business disaster.
This experience led us to closely examine our business and consider what could happen if we ever lost our offices again. And as you will see, things we did post 1993 were vital to our ability to recover after September 11th, but there were still many things we never thought we would have to overcome.
Central to our new approach was moving our fixed income business on-line, making it fully automated and global. The technology for this developed into eSpeed, the electronic system by which all the banks and investment banks of the world could electronically buy and sell over $43 trillion in bonds with each other annually. In 1999 eSpeed was publicly listed on NASDAQ and the way in which bonds were traded was changed forever.
First we made our fixed income business electronic. Then, we decided everything we had needed to be redundant. And not redundant in two’s, but redundant in three’s. We decided that instead of disaster recovery, we would use something called concurrent computing. In a disaster recovery site you have to go and turn it on. But what happens if you flip the switch and it doesn’t work? So our technology was concurrent - It was all going to run at the same time. Everything triangulated, so if you lost one, you would still have two. If you lost two you would still have one.
It is because we believed in triangulation that London had a mirror of all of our technology. It was because of this that the London employees would be able to have the business up and running on September the 13th, less than 48 hours after these attacks – when the bond market was set to reopen. We knew our competitors were pushing to open the markets quickly to try to take our leading market position. And so we had to open if we were going to remain in business. A long shot even with our remaining technology.
Let me give you an idea of the some of the major challenges we faced along the way.
Miraculously three of our senior US technology team, were off on an annual fishing trip that ended up being cancelled due to weather. They immediately went to our secondary site in New Jersey where the eSpeed trading platform was running and all the backup files were kept. But in order to gain access to the files we needed the passwords.
We thought we had a pretty foolproof system – Each person was to share his password amongst five co-workers, and then file it at the central site and then, all those passwords were stored again at the basement of the South Tower of the World Trade Center. The first Tower to fall.
But on September 11th, not only did we lose our main data center and the people who would have operated our secondary site but we lost all the passwords. So, for the first 12 hours in the United States, the survivors had to work to break into our own systems because they didn’t have the passwords.
The most immediate and seemingly impossible task that faced the London office was the need to rebuild a back office function for the US - The means by which we clear and settle every one of over 40,000 transactions per day. Not only so we could be open for business when the US Treasury market was set to reopen two days later, but in order to clear the billions of dollars of positions already in our system. Under normal circumstances, it might take months or more to construct an efficient back office combining the right people and technology, and establishing ties to an international host of counter parties and settlement organizations.
With a Herculean effort and endless staff hours spent without sleep, we were able to reconcile all the trades interrupted by the disaster. And with the help of bureau agency, ADP, we were once again able to provide our usual vital service to over 650 major institutions.
We had lost our US sales people. We had lost our client representatives. Our business and our technology were going to survive, but would our customers actually come back? They had all seen the devastation we had and so how could we even tell them that we were in business? And of course many of them had also suffered serious human and business losses as well.
With the reconstruction of the back office underway, eSpeed’s London sales team worked around the clock to contact and reconnect as many of the clients as possible. While eSpeed continued to function globally from sites in New Jersey and London, institutions that had been connected to the system in New York City were disconnected. Many, of them were also based in Lower Manhattan and had suffered sever damage to their own facilities. By rerouting their connections through our hubs in Europe and Asia, or via the Internet - clients accounting for 80% of our business were reconnected for the market open.
The morning of September 13th was tense as it came time to restart the eSpeed market place for US Treasuries from London. But not only did the system work, the screens were instantly full of prices as our clients showed us that they had been waiting to help, and expecting that we would be there for them. At this moment we suffered a profound mix of triumph and sadness because it only reminded us of all of our colleagues who were not there to share in this victory.
Trying to rebuild the company at the exact same time as trying to help the families of those who were lost, were two worlds running in parallel. All the time we had been scrambling to keep the business going, of equal or greater concern were our missing employees and their families. It seemed like an eternity before people started calling in. By Tuesday evening our time, only 125 employees were accounted for. Then slowly the numbers rose towards 350 over the next 24 hours.
Initially unable to reach anyone in NY, the US families began calling the London office very shortly after the Trade Center Towers fell, so we quickly organized a volunteer corps of partners and friends and gave them an emergency course in crisis communications so that they could provide information and take questions.
NY was able to set up a crisis center on the 12th of September so that victims’ families could come together and share their grief and anxiety, and receive counseling and information. Every single person who worked in the human resources department was lost and so were all the personnel records. So 24-hour hotlines set up in NY and London were vital for collecting information as well as providing it.
London set up a website, CantorUSA.com, where NY could post the most up-to-date information on employees and how and where they could get help. Because many of our families had Internet access it was a vital means of communicating with them, as well as the media, business associates and so many others who were eager for information.
We immediately set up the Cantor Fitzgerald Relief Fund, which became a recognized charity by the 14th of September, fully one month before even the established charities had set up their relief fund, because we knew that we needed to start taking care of our families right away. To date, we have raised and distributed nearly $39 million including 25% of Cantor’s profits, private donations and special fund raising events around the world.
With eSpeed operating in the US Treasury market and our family support network in place, the next hurdle we faced was the opening of the US equity markets on September 17th. Again, we were uncertain how well the newly built systems would hold up. So we made a rule. One trade per customer the first day we were open - just to make sure we could handle the business.
Our head of equities survived because he had been on a business trip on September 11th and drove all night to get back to one of our branch offices located in Connecticut. When he took the first client call on Monday when the market reopened, he explained that “We are open for business but we’re not here to impress anyone, we just want to do one trade – as a test.” And that client who was a big money manager said, “you don’t understand. Our management committee got together and we’re giving you all our business today, and you have to do all of our trades.” And he said, “We’re not sure we can handle it.” And she said “You don’t understand. If you don’t take these trades, I'm going to lose my job. I'm faxing them to you, you do the best you can,” and then she hung up.
And that happened across our business, making our first day mayhem because we had lost all but 6 of the 114 people who could handle this kind of business. We had at least as busy a day as we had ever had as a company - without the capacity to handle it. We were afraid that we would be crushed with kindness, because how could we process all these transactions? But once again our employees met the challenge and did the impossible.
How did we keep going? I think the one thing made the real difference - our innate need to honor and to take care of the families of those who we lost. We were and are totally committed, as a group, not only to carry on, but to give 25 percent of Cantor Fitzgerald’s profits, an estimated $75 million, to the families, over the next five years, and to cover a further ten years of their healthcare estimated to cost an additional $65 million.
But we could not announce this until we knew our business would survive. So we made a choice that was very difficult at a time when our emotions were so raw. To maximize the number of traders who would stay with us, we decided that the best way to communicate with our thousands of clients, the banks and investment banks of the world, and let them know we were still in business - was to go to the media, to go on television.
We went on television to say that we have the most incredible employees, that we are rebuilding this company to take care of the families of those we lost and that incredibly, that morning – just two days after September 11 - we would open for business with the financial markets in America. We never closed for one moment in Europe or Asia and we were still in business. We needed our clients to know we were there because it was not obvious that we could possibly survive such a horrible event.
Since that tragic and terrifying morning, there was a brief while when some doubted our sincerity. But the fact is, we have just stayed the course because it is a commitment by the management of the company to do the right thing. It’s a commitment by the company, by each and every employee, each and every partner, to do so. This commitment has enabled us as a team to have four consecutive profitable quarters since September 11th – generating over $25 million for the families.
So I think in closing, I will tell you that being in business was what my life was about before. But now, it’s being in business with a purpose. To take care of our lost friends’ families is the most important thing. And I think my employees feel exactly the same and we are united that’s what makes the Cantor Fitzgerald companies incredible.
Embassy
of the Unites States of America
Serrano 75
28006
Madrid, Spain
telephone: 91587-2200
fax: 91587-2303
(Within Spain use phone numbers without 34)
