"He's my close friend," Grano says of the former New York Stock Exchange chairman. "We talk every day."

What they talk about is between them, but Grano tells Institutional Investor: "He's disappointed. He's putting on a good face. Personally, I think it's more an issue of the [NYSE] board than it is about him. But that's the way the world works."

Not that Grano excuses the bull market excess that Grasso has come to personify. "Money can corrupt," he said in a speech last month at a Securities Industry Association conference in New York. "Our industry has taken a hit, and now we have to deal with it. Investor confidence has to be restored."

Despite the industry's troubles, Grano, 55, is looking for a new job. Having completed the integration of the old PaineWebber Group into Switzerland's UBS following their January 2001 merger, he says, "It's time to let the new kids run the show." A former U.S. Army Special Forces captain, Grano spent 16 years with Merrill Lynch before joining PaineWebber in 1988 and rising to president in 1994. He is handing the reins of 2 million-client UBS Wealth Management over to the firm's 49-year-old COO, Mark Sutton, a PaineWebber veteran and a former head of Kidder Peabody's investment services division.

Grano expects to be running another company before long. He also intends to hold on to his part-time job as chairman of the Homeland Security Advisory Council, a private sector panel formed last year by President George W. Bush. The group meets monthly, and Grano confers more frequently with Department of Homeland Security chief Tom Ridge on ways to prevent and respond to domestic terrorism. "Eighty percent of this country's critical infrastructure is owned and controlled by the private sector," notes Grano. "We have to connect the dots, and the DHS is a start."