The market maker, which had been running on backup generators since Sandy landed on Monday evening, is said to have lost power around 11:45 a.m. yesterday. According to a memo obtained by The Times, the firm told clients that "all computer interfaces with Knight will be shutdown with no new orders, both by phone or electronic, being accepted at this time."

It's been a hard year for Knight. The firm was one of the market makers to lose millions to technical difficulties at Nasdaq during Facebook's initial public offering, then required rescue from outside investors after losing $440 million due to a technical glitch in its own trading program.

Citadel Group and Goldman Sachs were among the firms to take increased trading volumes during Knight's outage, according to Bloomberg.

Other new from around Wall Street:

Morgan Stanley's office building at 1 New York Plaza, and AIG's headquarters at 180 Maiden Lane, will be closed for weeks as building managers deal with flooding after the storm, according to Bloomberg.

Activist investor Carl Icahn disclosed a 10 percent stake in Netflix in a filing with the Securities and Exchange Commission yesterday. “The reporting persons believe Netflix may hold significant strategic value for a variety of significantly larger companies that are engaging in more direct competition with one another due to the evolution of the Internet, mobile, and traditional industry,” Mr. Icahn said in the filing, according to The Times.

A British man charged with involvement in an insider trading scheme that stretched from New York to Central Asia told an informant he got privileged information from a former director of the New York Stock Exchange, reports Bloomberg.

The Federal Energy Regulatory Commission said it was seeking $435 million in civil penalties from Barclays for alleged energy market manipulation in the Western U.S. between 2006 and 2008. Barclays, which agreed to a $450 million settlement this summer over Libor-rigging charges, is also facing a Justice Department anti-corruption investigation over the firm's efforts to raise money in the Middle East in the early days of the financial crisis, The Journal reports.

JPMorgan is suing Javier Martin-Artajo, the trading manager who supervised the gamble on credit derivatives that led to the bank's $6 billion London Whale loss, in London Court.

The New York Stock Exchange had planned to open trading electronically while shuttering its physical trading floor. "We are open for business and at the same time acting in accordance with actions taken by the city and state of New York," said NYSE CEO Duncan L. Niederauer said in a release yesterday afternoon.

But NYSE reversed course  last night, announcing it would halt operations completely. The exchange is closed today, and may close tomorrow, "pending confirmation," according to a release.

Nasdaq is also closed today; "it is likely that the markets will be closed" tomorrow, the exchange said in a release.

Bond markets will open, but the Securities Industry and Financial Markets Association recommended that markets close at noon today.

Wall Street firms, meanwhile, have been asking nonessential staff to work from home. Goldman Sachs, Citigroup, JPMorgan and American Express are among firms to close buildings in evacuation zone A in downtown Manhattan. From a Citigroup memo published by The Times:

All staff based in Citi facilities within mandatory evacuation zones must invoke their work-from-home strategies for Monday and Tuesday unless they are in business-critical roles that have established alternative work locations. Other Citi facilities outside of mandatory evacuation zones should be accessible for critical personnel only; non-critical personnel should invoke their work-from-home strategies.

Four executives have departed from the firm's 15-member operating committee in the last year, including, of course, Ina Drew, the firm's former chief investment officer who fell on her sword following the multi-billion trading loss associated with the London Whale. In the shake up that followed, younger executives Mike Cavanagh and Matt Zames rose to new prominence, while Jes Staley, once thought to be a possible successor to Jamie Dimon, went off to audition for Barclays top job.

Then Barry Zubrow, the firm's head of regulatory affairs and former chief risk officer, said he would retire at the end of the year, followed by a Wall Street Journal report on Wednesday that chief financial officer Doug Braunstein would exit his current post for a new role at the bank sometime over the next two quarters.

Fortunately for the kibbitzers among us, JPMorgan had a conference call to discuss third-quarter earnings scheduled for the this morning.

"I find it truly irritating that people yak to the press like that," Mr. Dimon said when asked about Mr. Braunstein's future at the firm. "Doug is a top CFO, we will let you know when and if he moves on, not through gossip and the press."

And so we thought that was that, at least for now, until the end of the call when Mr. Dimon was asked whether he had any closing comments.

"I'm surprised no one mentioned how handsome Doug Braunstein looked in the Journal," he said.

Mr. Lee.

Two giant JPMorgan profiles landed this week, and it was a familiar character who delivered some of the more memorable lines in each of them. James Bainbridge Lee Jr.—better, Jimmy—is the legendary deal maker this paper once described as "the maestro of the syndicated loan market, Wall Street’s most famous corporate bailout artist," now the vice chairman for investment banking at JPMorgan.

That position—and, we suppose, that he was willing to pick up the phone and go on record—made him a natural source for Vanity Fair's profile of Jamie Dimon, in which Mr. Lee offers the first (and last?) word on the JPMorgan chief executive ("[He] has moral courage running through his veins”); and also serves as a catalyst for the tidbit VF used to hype the story—in the middle of the hubbub over the London Whale, Mr. Lee asked New England Patriots quarterback to tell Mr. Dimon "to hang in there."Mr. Lee built his career at Chemical Bank, where he leveraged the bank's lending relationships to win investment banking business, became a key figure in the syndicated loans and eventually, leveraged buyouts. Along the way, he happened to work alongside a particularly competent young trader named Ina Drew—which is how Mr. Lee also wound up providing our favorite anecdote in Susan Dominus' 7,500-word New York Times Magazine write-around on JPMorgan's former chief investment officer (and the woman who presided over the $5.8 billion trading loss that led to Mr. Dimon's phone call with a Super Bowl MVP).

James Lee, who eventually became one of the biggest dealmakers on Wall Street, started out at Chemical Bank in New York sitting next to Ina Drew. He remembers talking to a client on the phone one day, trying to answer some questions about a deal the bank was proposing. “So I told the client what I thought, and I’m answering and answering, and I say, ‘So what do you think?’ ” Lee says. But there was no response. Lee looked at the phone and then looked around. Drew, a foot away, was in the middle of a different phone conversation, but her eyes were on him, and she was shaking her head back and forth — no, that’s not right — and waving her hand to show she had something in it: the phone jack. “She heard part of what I was saying, which was obviously incorrect,” Lee says. “She literally pulled the plug on me.”

Charlotte, N.C., would show the financial industry more love, said Mr. Bove.

New York State Attorney General Eric Schneiderman filed a civil lawsuit against JPMorgan yesterday, charging the firm with widespread fraud committed by the mortgage securitization unit of Bear Stearns, which JPMorgan acquired in 2008. Not everyone was impressed.

JPMorgan spokesman Joe Evangelisti said the bank was "disappointed" that Mr. Schneiderman filed his lawsuit without giving the firm a chance to rebut claims, in a statement emailed to press outlets. The complaint contains no new revelations and is marred by a sloppy error, wrote Bloomberg columnist Jonathan Weill.

Perhaps the strongest reaction came from Rochdale Securities analyst Richard Bove, who said New York's role as a financial capital is "an anachronism," according to Net Net, in a note distributed today.

"I am constantly struck by the fact that Michigan does not sue the auto industry; Texas is not suing the oil industry; California is not suing the entertainment industry; and Florida is not suing the tourism industry," Bove wrote. "They do not sue farmers in Iowa. New York never stops suing the financial industry. Why? What do these other states understand that New York does not?"

"The financial industry that is left remains committed to New York because it has sunk cost there and because of proximity among firms," he said. "However, if financial companies are going to continually be sued for billions and even tens of billions of dollars, the legal costs of remaining in New York exceeds the sunk cost in buildings and equipment."

If you can't make it here ...

Bear Stearns' former offices at 383 Madison Avenue.

Every now and then, a lawsuit or legislative report emerges to remind us just how out-of-control the U.S. mortgage business was in the years leading up to the financial crisis, and a civil tort filed today by the New York State Attorney General Eric Schneiderman is a fine example. (A congressional investigation into Countrywide's program to provide discounted loans to lawmakers, the results of which were published in July, also comes to mind.)

Mr. Schneiderman's suit brings fraud charges against JPMorgan with widespread misconduct in the packaging and sale of mortgage securities committed by Bear Stearns. These practices, of course, helped sink Bear Stearns, leading the investment bank to be acquired by JPMorgan in 2008, and the broad details—that Bear so coveted the profit available by selling mortgage-backed bonds that it became indiscriminate in the loans it purchased for securitization—are well known, and were common to any number of Wall Street banks. For all the ubiquity of the alleged practices, Mr. Schneiderman's complaint still makes for a shocking read:Bear Stearns was buying junk ... "... numerous originators who were top contributors to Defendants’ RMBS were on the Comptroller of the Currency’s 'Worst Ten' mortgage originators in the 'Worst Ten' metropolitan areas due to their loans’ high rate of foreclosures during the period 2005 to 2007."

... in no small measure, because it residential mortgage-backed securities business was growing so fast ... "In 2003, EMC securitized 86,000 loans valued at approximately $21 billion. That number nearly tripled in 2004, to approximately 231,000 loans valued at $48 billion. In 2005, the number jumped to approximately 389,000 loans valued at nearly $75 billion. Finally, in 2006, EMC securitized over 345,000 loans valued at $69 billion. From 2003 through 2006, EMC securitized over one million mortgage loans valued at the time in excess of $212 billion."

... and which rapid mortgage acquiring led to lapsed quality control standards ... "To accommodate this massive volume of loans, Defendants’ due diligence process abandoned certain basic inquiries—such as determining the reasonableness of income in a 'stated income' loan. According to dozens of former due diligence firm employees and EMC underwriters, the very high volume of 'stated income loans,' and their limited ability to probe the reasonableness of the income stated, was one of the greatest challenges of the due diligence review."

... which was plain enough to those involved ... "Defendants were aware that many of their loan originators were selling defective loans but continued to buy and securitize those loans. For example, according to a June 2006 internal Bear Stearns email, almost 60% of AHM loans that were purchased through the conduit were 30 or more days delinquent. After learning this information, Defendants went on to issue over 30 subprime and Alt-A securitizations that included AHM loans."

... even if the lapses were expedient to ignore ... "Indeed, far from making an effort to improve their due diligence review—and thereby improve the scrutiny of the loans they were purchasing—Defendants, as early as February 2005, began to reduce the amount of due diligence conducted 'in order to make us more competitive on bids with larger sub-prime sellers.' As one senior executive acknowledged in testimony, the 'reduction in due diligence could be a response to a request from a seller.'"

... ok, we can't resist, one more ... internal communications reflect Defendants’ awareness of the bad quality of loans that were being included in other securitizations. In connection with the Bear Stearns Second Lien Trust 2007-1 ('BSSLT 2007- 1') securitization, for example, one Bear Stearns executive asked whether the securitization was a 'going out of business sale' and expressed a desire to 'close this dog.' In another internal email, the SACO 2006-8 securitization was referred to as a 'SACK OF SHIT' and a 'shit breather.'"

Of course, Mr. Schneiderman's lawsuit is not mere historical relic. As The Wall Street Journal points out, the suit filed today is merely the first in what could be a series of actions against the banks, and which, if successful, could lead to another round of litigation costs weighing on the lenders' bottom lines. In the meantime, though, we can only shake our heads at another chronicle of the housing bubble.

Right on time, The Wall Street Journal has an "analysis" that shows Libor doesn't actually reflect banks' borrowing costs.

Kareem Serageldin, the former head of Credit Suisse's CDO business arrested in London on Wednesday, said he will fight extradition to the U.S. When Mr. Serageldin was charges in February for running a scheme to falsify trading positions, he expressed surprise over the indictment, noting through lawyers that he was cooperating with attorneys. When he was nabbed outside the U.S. embassy in London this week, he said through a lawyer that he was working on a plea deal, and that his capture was the result of "miscommunication."Investors pulled capital from Spain for the 13th straight month.

Treasury Secretary Tim Geithner is wading into the void left when the Securities and Exchange Commission decided not to propose new rules for money market funds.

The White House is circulating a draft executive order on cyber-security after a string of DDoS attacks on the consumer banking websites of Bank of America, JPMorgan Chase, Wells Fargo and other financial firms.

Former Lehman Brothers CFO Erin Callan is flying her East Hampton coop.

A forgery suit against Allen & Co. CEO Herb Allen—who was being sued on claims that he had conspired to forge a dying cousin's will—has been dismissed.

True story? A British oil trader got blotto, bought $520 million in oil futures in the middle of the night, had no recollection of any of it. The Financial Services Authority suspended him for five years, commented dryly: “Mr Perkins poses an extreme risk to the market when drunk.”

Would you give money to a hedge fund called POOF? Would you be surprised to learn that said fund's manager just coughed up $6.8 million to settle cherry-picking charges—that he stuck clients with losing trades and moved profit-making trades to his wife's account?

“This is a great day for the art world and all those who seek order and justice in our society": Bond king Jeffrey Gundlach's Mondrian has been recovered.

Yipit CEO Vinicius Vacanti

“I felt like in finance, the playbook was already written, and it was my job to execute,” said Vinicius Vacanti, co-founder and chief executive officer of Yipit, a startup that delivers personalized daily deals aggregated from other services. “Someone had done it before I did, and someone was going to do it after. In a startup, there’s no playbook. You’re making it up as you go along.”

It was Wednesday night at General Assembly, and 30 bankers, mostly young, mostly male, mostly dressed in shirts and slacks and keeping one eye trained on their mobile devices, had turned out to listen to founders from New York’s startup scene talk about their transitions from Wall Street to Silicon Alley. It was a hot ticket.

Call it a function of lower pay at financial firms amid lower profits and increased regulation, call it the Facebook Effect, in which the best-and-the-brightest dream of becoming the next Zuckerberg or Pincus—or changing in cultural attitudes, though we've yet to meet a young banker who said that the Occupy movement influenced them personally. Call it what you want, but if the 70 names on the waiting list for last night's event is any indication, the startup world is increasingly appealing the to smart, ambitious 20-somethings who chart a path that starts at investment banking.

“People are seeing all of these small startups blowing up and they want to be a part of the next big thing,” said Sameer Syed, a former JPMorgan analyst who helped organize the Wednesday night session. “In finance, you’re not building a product, maybe you’re funding the development of the economy, but you’re not building anything tangible. People want to be a part of that.”

The event was born when Mr. Syed sat down with Matt Minoff, a former Allen & Co. banker and the founder of digital advertising startup Selectable Media. Mr. Syed knew he wanted to leave banking for the tech world, but didn't know how to go about it.

“The difficulty I was having was that startups didn’t understand my background,” he said. “They viewed me as a finance function, someone who can do payrolls or budgets. Matt told me, ‘These are your skills, this is what startups need, this is how to spin yourself.’ I said, ‘This was so useful, I need to get access to more people like you. There are a lot of people like me who want to get out of finance but don’t know how.’ He said, ‘Why don’t we put something together?’”

To that end, Wednesday night's session was one part practical advice, one part inspiration. The startup world provides the chance for self-determination, said Mr. Minoff, and freedom from some managing directors' late-night demands; it's a place where people sometimes work with their shoes off and say crazy things, said Jordy Leiser, who left JPMorgan to found STELLAService, which rates customer service at online shopping sites; it offers the chance to fail gloriously, said Mr. Vacanti, whose decision to leave Blackstone started with a question.

"What if I wake up at 40 and feel like I never failed at anything—would I think, 'Maybe I didn't set the bar high enough?'" he said. "In a startup, you’re constantly failing, and it's an awesome experience. You celebrate in a different way when you've also faced defeat."

Which isn't to say it's all fun and games. Leaving Wall Street means saying goodbye to the fancy dinners, and giving up a badge of honor in the adult world. "It's a pride of position," said Ben McKean, founder of Savored, which helps restaurants provide variable pricing based on demand for reservations at given times. "I earned a top spot at Merrill. Now all of a sudden, people are asking what you do, and you say, 'I'm starting a company and I can't even describe it because it's too early.'"

Meanwhile, tech companies are likely to find young bankers attractive for the same reason Wall Street firms do. "It's going to be your job to hustle," said Mr. Leiser. "There have been times where I've literally run to the office because there was something I had to do."

There was more specific advice. Consider working at an existing startup for a couple of years before launching your own project, all agreed: “If you go out and start something on your own, it might take 24 months before you even know what you’re doing,” said Mr. Minoff.

Don't pitch yourself as a finance or business development guy, but as an operations whiz. “You’re extremely smart, crazy hardworking, and very nimble—that's your pitch,” Mr. Vacanti said."Our companies are operational nightmares. There should be plenty of roles for you."

Data analysis is another promising route, said Mr. McKean, who hired a finance type who cold emailed him from business school. "Send me your database," the woman said. "You'll be amazed by what I find."

If you don't start your own company, don't waste money on outside developers or legal advice, and don't treat your idea like a state secret. "Non-disclosures will get you laughed at," one of the panelists said.

Pressures and lean years aside, none of the founders on the panel expressed lingering yearning for the Wall Street world.

“How many people do you know who left finance for a startup, then went back?” Mr. Vacanti asked.

None, no one, zero, they answered.

Somewhere, an algorithm read the coverage of yesterday's Senate Banking Committee hearing on high-frequency trading, and figured it will take years for the government to hammer out reforms to fix market structure issues.

Stephen Morse, the Barclays executive who ignored employees' warnings that the bank was manipulating its Libor submissions, has been sitting out the ensuing scandal from his post as head of compliance at TD Bank.

The Federal Energy Regulatory Commission said it may suspend JPMorgan's energy trading business for failing to comply with requests for information about the firm's trading profits, Bloomberg reports.

The Securities and Exchange Commission is scrutinizing whether private equity firms are taking more profits than they should, or taking profits too soon. The agency received increased authority over private money managers under Dodd-Frank.

The federal government's mortgage task force, co-headed by New York Attorney General Eric Schneiderman, is getting ready to do ... something?

More than 100 lawmakers have lobbied federal authorities on the implementation of Dodd-Frank, according to The New York Times.

Madoff trustee Irving Picard put checks in the mail yesterday—$2.5 billion in payments to thousands of investors duped by the Ponzi schemer.

Does anyone want to bail out Greece (again)?

Youth unemployment is also on the rise in prosperous northern Europe.

A Brazilian official said that the Federal Reserve's new bond-buying program would set off currency wars—Business Insider explains.

Nomura is eliminating four of 12 investment banking jobs in Dubai, according to Bloomberg, on the heels of the decision to dump a London-based prop trading team.

Britain is considering whether it really wants to be known as the "divorce capital of the world." That means, the Ministry of Justice is reviewing court standards that favor the less-wealthy spouse in split-ups.

Are you reading this from Jeffrey Gundlach's Porsche Carrera 4S? Would you like to make a deal?

The Winklevoss twins are disrupting the sell side, or trying. After winning a settlement believed to be worth at least $65 million from Facebook, the twins pumped $1 million into SumZero, a social network for the buy side. "We always saw ourselves in careers as entrepreneurs or angels," Cameron Winklevoss told The Wall Street Journal. "My favorite toy as a kid was Legos. I loved building things, and that's what we're doing with SumZero."

Not wanting to be left out of anti-money laundering investigations, the Office of the Comptroller of the Currency is probing JPMorgan.

Best Buy founder Richard Schulze met with lenders last week as he seeks financing for his bid to take back his old company. Mr. Schulze's plan is not fully baked, a source told The New York Post; in addition to bankers, Mr. Schulze is seeking to partner with private equity firms. 

The Times headed north to profile the most interesting man in the Adirondacks: Sandy Lewis, the son of Bear Stearns managing partner Cy, a man who pleaded guilty to a case of insider trading he committed to prove a point, who once tried to counsel Bill Clinton on the former president's extramarital affairs, and who in retirement, is spending a lot of time emailing journalists.

Wall Street expects weak third-quarter profits across corporate America, says The Times.

Elaine Tettemer Marshall, America's fourth-richest woman, controls almost 15 percent of Koch Industries, according to Bloomberg. Her fortune has been in a "near-constant state of turmoil" since her father-in-law, J. Howard Marshall II, married Playboy model Anna Nicole Smith in 1994.

Chinese billionaires lost one-third of their wealth last year, according to CNBC.

Warren Buffett is done with radiation treatment to combat prostate cancer, the 82-year-old Berkshire Hathaway chairman said on Friday.

TD Ameritrade founder Joe Ricketts, who owns the Chicago Cubs and online news service DNAInfo, is going ahead with plans to spend $10 million on ads to support Mitt Romney—turning Chicago mayor Rahm Emanuel into a fan of the White Sox.

General Motors is pushing the government to sell the stake in the automaker acquired in a 2009 bailout, according to The Journal, in hopes of escaping the stigma of state-ownership, and lifting restrictions on executive pay. The government is balking, at least until share prices rise.

Russia's favorite pyramid schemer—the "evil genius" Sergei Mavrodi—is at it again.