Wall Street Six Years Later

The world remembers Sept. 11, 2001, every year. Wall Street still lives with it every day.

"We don't have to be reminded," says Fred Price, managing principal of Sandler O'Neill, which lost 39% of its employees, including its founder and nine of its 31 partners, to the tragedy.

But while wounds remain fresh, six years after the attacks, the long-feared exodus of the financial community from New York never materialized, despite some high-profile departures. Despite losing 20,000 financial jobs to New Jersey and 5,000 to Connecticut post-Sept. 11, the number of people employed in the industry in New York has now returned to a pre-attack 190,000 jobs, according to the Securities Industry and Financial Markets Association.

Even at the firms that were hardest hit, business has rebounded. One-fifth of the deaths came from Cantor Fitzgerald, where 658 people were unable to escape from their offices on the 101st to 105th floors of the North Tower. Facing extinction in the days that followed, Cantor's remaining managers, led by Howard Lutnick, hired furiously to get the business moving again.

Six years later, Cantor has regained much of its status as the king of bond brokerage and has expanded into other areas, including property and equity derivatives and a virtual exchange where traders can speculate on the box-office performance of Hollywood films.

Keefe Bruyette & Woods, a rival to Sandler O'Neill in the niche world of investment banking for banks, lost 67 employees, including its co-CEO and almost its entire research staff. Like Sandler, it has survived -- and prospered--through pluck and sheer force of will.

KBW has taken itself public (its stock is up 19% from its November 2006 IPO) and continues to represent some heavy merger and acquisitions hitters, like Bank of America, a bank with which it has a long-standing relationship.

Across the street from the towers were the offices of Lehman Brothers and Merrill Lynch, The Wall Street Journal and Deutsche Bank. Lehman has since decamped to Midtown, while Merrill and the Journal have returned to the World Financial Center. Deutsche Bank abandoned its office tower and moved to the former JPMorgan building on Wall Street.

Morgan Stanley, once the biggest tenant of the towers, with more than 800,000 square feet of office space, now occupies a perch in Times Square. Most of its 3,500 World Trade Center employees escaped that day.

But that doesn't mean things haven't changed. Many firms that were hit hard moved operations elsewhere. Marsh USA, a division of MMC, lost 295 employees, though its offices in the North Tower, just under those of Cantor, were not its headquarters, which is still in Midtown. The surviving Marsh employees have scattered to other Manhattan locations.

The New York Stock Exchange has also been radically shaken up in recent years as well--but not by Sept. 11. The Big Board embraced electronic trading, acquiring electronic network Archipelago Holdings last year and moving its floor brokers--of whom there are significantly fewer numbers--to a hybrid trading model. NYSE even went public and bought a European exchange.

But Sandler O'Neill's Price says more fundamental changes in the tight-knit community are evident as well. "It's hard to explain. People care differently now," he says, citing the support for charitable causes to help Sept. 11 families. "There's a sensitivity that's out there.

And then there are the constant reminders in everyday things--streets, landmarks, and most of all, absences.

"In NYC," he says of the day, "you always remember it as the people who aren't here."

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