Wall Street analyst finds guilt part of post9-11 job

That is no ordinary reaction, until you consider his position: Though he had no management experience, he was hired from the outside last September at age 36 to run the stock-research department at Keefe, Bruyette & Woods Inc. The boutique securities firm, with offices on the 88th and 89th floors of the South Tower of the World Trade Center, had lost 67 employees, nearly one-third its staff, in the Sept. 11 terrorist attacks, including 16 of its 21 analysts and its research chief.

The guilt over how he got the job will never leave him, Mr. Corasaniti says. So when he accepted the job of rebuilding the decimated research department, he argued with the firm's brass about taking compensation and gave his $25,000 year-end bonus to the firm's "Family Fund," which goes to the families of staff members who were killed. "I have done nothing but come in and put on a tie," he says.

From the first, he knew it wouldn't be easy. "Just being in the office was like attending a huge funeral. It was so sad," he says. After his first day, he went home and thought: "God is really asking a lot of me," Mr. Corasaniti recalls. "Then I realized he also expects a lot of me." Being thrust into the job with no previous management experience, he harbored concerns about whether he was up to the task - and so did his new bosses.

Indeed, for Mr. Corasaniti the road has been bumpy. It has been a year of emotional ups and downs. Of winning the full acceptance of his new colleagues. Of learning to be understanding, and when it was okay to be demanding, with employees grieving for lost friends. And of accomplishment, helping Keefe to survive when many thought it wouldn't, especially in the current economic environment.

Mr. Corasaniti is one of a number of untested Wall Streeters who were elevated unexpectedly to senior-level management positions without the benefit of the normal learning curve.

"In periods of disruption, people are often consumed by their own emotion and fear and they look for leadership," says Wall Street veteran Michael D. Madden, a principal in Questor Management Co., a merchant bank. "In a sense, the promotions (out of Sept. 11) were no different than battlefield promotions."

Just four months before he was hired by Keefe, Mr. Corasaniti had taken a "sabbatical" from his career on Wall Street for a slowerpaced life, working at a tiny research boutique and teaching a business class at Columbia University in New York. His previous management experience, he jokes, was running a fraternity at Tulane University in the mid-1980s.

At Keefe, he has found even the most routine events can be awkward. When Mr. Corasaniti brought his two-year-old son James into the office Friday for a few hours while his wife went to an appointment, he was ill at ease. "Kids represent joy and energy and that is not how things feel right now so close to the anniversary," he said.

The challenges came early. Not long after Mr. Corasaniti began, he learned the hard way how to run something as simple as a morning meeting. There were 17 new analysts - and each was eager to get the floor, much to the chagrin of some veteran Keefe salesmen. The meetings were chaotic and often would run long, leaving the frustrated sales force behind schedule. Said analyst Cliff Gallant: "They would walk out sometimes and just roll their eyes."

Mr. Corasaniti responded by giving each analyst a list of key points to cover in the meeting. Above all, he counseled them: Keep it brief.

The past, it seems, is never far behind. Few days go by when Mr. Corasaniti doesn't think of Keefe's former research director, David Berry, an old friend who was killed in the terrorist attack. On Thursday, during a business trip to San Francisco, Mr. Corasaniti sat in his room at the Ritz Carlton Hotel, analyzing the recent regulatory woes of Citigroup Inc., one of three companies he covers. "What would Dave do, what would he say?" he thought.

It has all been a far cry from the new life Mr. Corasaniti had looked to carve for himself. On Sept. 11, he was working out of a third-floor walkup in Manhattan's Greenwich Village, helping run a small research shop, Graham Fisher & Co. The one-room office he shared with four others seemed a long way from the Wall Street digs he left behind four months earlier. But long lunches at the neighborhood's sidewalk cafes were just his speed.

After three years as a specialty finance analyst at Alex. Brown & Sons Inc. and an additional six years at Neuberger Berman LLC, including three as a portfolio manager where he oversaw $3 billion in client funds, Mr. Corasaniti needed some time off, saying he simply had "burned out."

That all changed after the terrorist attacks. On Sept. 18, he joined hundreds of others who offered to help Keefe. After reading a list of the missing staff posted on Keefe's Web site, he e-mailed Mike O'Brien, a friend and Keefe board member whom he had dealt with at Neuberger.

"I want to volunteer to help you all get back on your feet in any way possible that you need, writing research, trading, clearing trades, I've done all the jobs on Wall Street," he wrote. "I can also bring in a bunch of my students to help out as well, all without need for compensation."

Two days later, his phone rang. But what Mr. Corasaniti didn't know when he showed up at the firm's makeshift offices on Seventh Avenue in midtown Manhattan was that he was one of just two candidates on the firm's short list for research director. The other was former Keefe analyst Lawrence Vitale.

It was imperative that Keefe, facing rumors it could be forced to shut its doors, move fast. And Mr. Corasaniti knew Keefe well from his days at Neuberger. Keefe Chairman John Duffy says Mr. Vitale was hired as senior stock trader and Mr. Corasaniti got the nod as research chief in part because his experience would be needed to mentor several new analysts.

"I did have my doubts," acknowledges Mr. Duffy, whose son Christopher, a stock trader at the firm, was killed on Sept. 11. "On top of everything, I knew he had taken some time off to teach ... But we had a gut feeling about him."

The hiring of an outsider to run the research department, rather than someone from the ranks of those who survived, added to the surreal atmosphere that emerged in the months after the attacks, says analyst Cliff Gallant, 31, one of the survivors who made it out of the twin towers alive. Still, no one resented Mr. Corasaniti, he adds. Quite the opposite: "None of us have the energy to do it, but we knew someone had to," Mr. Gallant says.

Emotionally, the firm is still very much a work in progress. Mr. Corasaniti says he still gets those knocks at the door from staff looking to talk. Priorities have changed. "A lot of people woke up and said, `I am alive but not really where I want to be,' " he says. He says he hands people a blank piece of paper and tells them to write down where they want to be professionally. "In most cases, we are almost there."

There were trials, he says, as the analysts who survived the attacks returned to work. "There were a lot of tears at first," Mr. Corasaniti says. He made it clear to them they were under no pressure to issue research reports immediately and made a point of running interference for them with other departments. "I knew they would come back stronger than ever, and they have; it would just take some time." He says watching each of those analysts re-establish coverage on their companies, and the sense of satisfaction it gave them, is something he will never forget.

Only five analysts survived, and it would be months before some, like Lauren Smith, who was injured, returned to work. Mr. Corasaniti says his first big accomplishment came Oct. 17 when the firm got its first post-Sept. 11 research note out to clients. "Forget the technology challenges, at first we didn't even have enough research," says Mr. Corasaniti. While some analysts, like Mr. Gallant, began publishing almost immediately, Ms. Smith was hospitalized for months and didn't resume coverage of her firms until April.

Mr. Gallant says in some ways he is working at an entirely different firm. "Most of us have no history together," he says. He says Mr. Corasaniti has taken a more hands-on approach to the department than Mr. Berry did, which has been required because there are so many new analysts. For instance, his advice to the new analysts to better summarize their information to the sales force paid immediate dividends.

Financially, Keefe has scrambled back nearly to where it was a year ago. Revenue at the closely held firm for the first six months of this year was within 5% of the approximately $80 million a year earlier, Mr. Duffy says. Keefe posted a respectable 15% return on equity, and its capital of about $140 million isn't significantly lower than the $160 million before Sept. 11.

But the rebuilding effort has been immense. The firm now puts out research on 195 stocks, up from 33 after Sept. 11, though still shy of 270 previously. Mr. Corasaniti estimates Keefe has resumed coverage on about a company a day.

It has been trial by error. He has interviewed more than 700 people since last October. Mr. Corasaniti says he is sometimes forced to delay publishing a research report because of so many others in the pipeline. In May, for instance, Keefe had to delay publishing research on the credit-card industry and Lehman Brothers Holdings Inc. to push out a report on regional banks. It was further back in the queue, but took priority because the analyst involved had planned a marketing trip around his work. And Lisa King, the woman who coordinated the publication of Keefe's research, was one of the employees who died on Sept. 11.

"I just can't figure out how to get this stuff through the pipeline any faster," Mr. Corasaniti says.

Uploaded September 11, 2002