Wall Street & Technology is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


10:48 AM
Connect Directly

Lehman Brothers Stays Together

Lehman Brothers' CIO Jon Beyman took August 14th off but didn't have the relaxing day he planned.

Lehman Brothers' Chief Information Officer Jon Beyman took Thursday, Aug. 14 off. Rather than wasting the beautiful summer day on conference calls and in meetings at his office, he decided to spend the day with his family, taking his wife and three children to visit the Intrepid on Manhattan's West Side. But just as Beyman and his family were preparing to sit down for an early dinner, the lights went out.

Faster than Clark Kent in a phone booth, Beyman morphed from Dad into Wall Street CIO. "It became clear pretty quickly that there was a widespread outage," he says. "I soon had contacts with state and local officials who told us that it was not going to be a quick thing."

Beyman did not head to the office, but rather spent most of the next 24 hours on his phone and Blackberry communicating with staff. He says that a process instituted after the Sept. 11 attacks helped ease the pain of the blackout: calling trees. Beyman notes that one of the most important factors in dealing with any crisis is ensuring continuity of communications. Up to date calling trees, which allow for organization of conference calls and incident-management-team calls, are critical.

More critical, however, is ensuring a constant source of power to the systems that power Lehman's business. Beyman says that the firm's data centers, located on 10th Ave and in Jersey City, along with the main trading floors at 745 7th Ave, immediately switched over to diesel generators.

"There were problem in the office tower above the 9th floor, something in the system failed, but the trading floor didn't lose power," he says. So, employees who worked in the tower were allowed to work from home on Friday. "This goes back to Sept. 11 -- as long as you have a PC and Internet connection, you can get at your desktop."

Across town, where Lehman maintains office space at 399 Park Ave. for its retail brokers, Beyman says the situation was a little different. That building, which is not owned by the firm, does not maintain backup generators and was therefore down all day on Friday. "We ended up sending some of the brokers to Jersey City," he says.

As far as the firm's technology performance, Beyman says he was pleased. "Internally, everything came up. Though we did have some phone and PC problems, we didn't have any widespread application problems." He says the communications issues can be attributed to Verizon and MCI losing power in some of their central offices, which caused the firm to lose a few direct lines with counter parties. For the large players, that was only an inconvenience. "However, we found that some of the smaller hedge funds didn't have any backup and you just couldn't get them."

Lehman finally cut back over to electric power on Sunday, after Beyman was assured that the city's grid was stable.

For Beyman, and other IT execs on Wall Street, the past few years have been challenging, to say the least. "These are not really the experiences you want to have. You want to have experiences where you say, 'Gee, I worked on Wall Street when they made money hand over fist and everyone admired the people that worked there, and it was the greatest profession that you could ever imagine,' but it's been a little more difficult than that. I don't want to minimize this but it was a big inconvenience as opposed to a major event like Sept. 11 -- that was something I hope never to live through again."

Register for Wall Street & Technology Newsletters
Exclusive: Inside the GETCO Execution Services Trading Floor
Exclusive: Inside the GETCO Execution Services Trading Floor
Advanced Trading takes you on an exclusive tour of the New York trading floor of GETCO Execution Services, the solutions arm of GETCO.