A Blow for Financial Community

The attack on New York’s towering World Trade Center complex Tuesday struck one of the main U.S. financial centers, wiping out much of the largest trading company in Treasury securities and probably crippling several big brokerages and the Oppenheimer mutual funds.

Though it is unclear how many people died in the attack, many of the victims probably worked in the investment, banking and insurance industries because of the nature of the tenants of the building.

The net of terrorism also caught other victims, including passengers on the hijacked jetliners.

Brokerage Morgan Stanley Dean Witter & Co. was the single largest tenant in the complex, occupying 22 floors of 2 World Trade Center, or about 12.5% of the office space in the tower and an additional three floors of a smaller, adjacent building, according to a spokeswoman.

About 3,500 employees worked in the complex, and Morgan Stanley was trying to determine the fate of its workers. The heads of Morgan’s major business units were safe. The company’s headquarters is in a different area of New York.

Switzerland’s Credit Suisse Group and Germany’s Commerzbank, Deutsche Bank, Bank of America Corp., Union Bank of California and market data firm Thomson Financial, a unit of Thomson Corp., had offices in the World Trade Center.

“Many of these workers would be traders, analysts and financial experts,” said Bradford Cornell, a professor of economics at UCLA’s business school. “We are looking at tremendous damage in terms of human capital and the infrastructure of these companies.

“But this is mostly in the financial sector,” Cornell added. “We aren’t seeing the manufacturing operations of major companies being interrupted.”

USC finance professor Lawrence Harris said the financial knowledge lost in the World Trade Center attack will be replaced by people in similar positions in other areas of New York and other financial centers.

Nonetheless, the human toll in the financial community probably will be huge, he added.

Five hundred to 1,000 employees occupied the offices of Cantor Fitzgerald on floors 101 to 105 of 1 World Trade Center. The fate of those workers is unknown, and according to one wire service report, a trader reached by phone just after the attack said he thought they all would die.

Cantor Fitzgerald accounts for about a quarter of the U.S. government bond market’s $284-billion daily average trading, based on transactions reported by the 25 primary dealers in the second quarter, excluding repurchase agreements, government-sponsored enterprises and mortgage-backed securities.

The firm’s software is “undoubtedly archived, but this is going to be devastating to the company,” said USC’s Harris. “Lots of competitors will step in and take their business.”

Fiduciary Trust Company International, a large money manager owned by Franklin Resources Inc. of San Mateo, was headquartered in the upper reaches of 2 World Trade Center.

Another important financial tenant was OppenheimerFunds, the 10th biggest U.S. fund company with $80 billion in long-term assets, according to Financial Research Corp. The 600 employees of Oppenheimer Funds who worked in one of the two towers are believed to be safe, said Jim Lacey, a spokesman for the company’s parent, Massachusetts Mutual Life Insurance Co., known as MassMutual.

The insurance industry, which expects to face claims of more than $5 billion from the disasters, also took a direct hit. The World Trade Center housed offices for numerous insurance companies, including Allstate Inc., Fireman’s Fund, Kemper Insurance Co., SCOR Reinsurance Co., Partner Reinsurance of U.S. and General Security & Indemnity.

Two executives killed on one of the doomed flights were:

* Edmund Glazer, 41, chief financial officer and vice president of finance and administration of Chatsworth-based MRV Communications Inc., a manufacturer of optical network components and systems.

* Daniel Lewin, 31, co-founder and chief technology officer of Akamai Technologies Inc., which makes software to deliver Internet content faster.

Bloomberg News and Reuters and Times staff writers Josh Friedman and Liz Pulliam Weston contributed to this report.