Trillions of dollars worth of stock certificates and other paper securities that were stored in a vault in lower Manhattan may have suffered water damage from Superstorm Sandy.
The Depository Trust & Clearing Corp., an industry-run clearing house for Wall Street, said the contents of its vault "are likely damaged," after its building at 55 Water Street "sustained significant water damage" from the storm that battered New York City's financial district earlier this week.
The vault contains certificates registered to Cede & Co., a subsidiary of DTCC, as well as "custody certificates" in sealed envelopes that belong to clients.
The DTCC provides "custody and asset servicing" for more than 3.6 million securities worth an estimated $36.5 trillion, according to its website.
"At this point, it is premature to make an accurate assessment as to the full impact of the water damage nor would it be helpful to project on what specific actions need to be taken with respect to our vault," said DTCC Chief Executive Michael Bodson in a statement. "We are aggressively working on this situation to minimize disruption to our clients and will provide additional updates as more information becomes available."
Bodson said the DTCC's computer records are intact and that the corporation has "detailed inventory files of the contents of the vault."
The building remains inaccessible, but the lower floors are believed to be flooded. The full extent of the damage cannot be assessed until power is restored and the building is deemed safe to enter.
The DTCC has been operating from remote facilities since the onset of the storm and has maintained clearing, settlement and other services that are crucial to the functioning of Wall Street, according to Bodson.
Bodson said the DTCC is working with couriers to ensure that all deliveries are rerouted to a facility in Brooklyn, and the group expects all other services related to physical securities processing to resume "in the next several days," he added.
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