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THE STORY OF THE DEPOSITORY TRUST & CLEARING CORPORATION
“Our colleagues were not flustered. They knew the situation was a tough one for Knight and a difficult situation for us, but they understood exactly what had to be done. Sometimes, the most important thing you can do is not doing something, in this case not shutting them down, and letting Knight get out of this position. Otherwise, it would have been a massive loss that would have been mutualized across all of our clients.”
Superstorm Sandy
There was hardly time to recuperate after the Knight Capital incident before another challenge arose. A massive storm hit the Eastern Seaboard, including New York City, in October 2012. Superstorm Sandy was the largest Atlantic hurricane in diameter on record. When it made landfall in Atlantic City, New Jersey, on October 28, it brought sustained winds of 80 miles per hour. It also came ashore during the full moon and high tides, amplifying its impact. A storm surge of 14 feet, combined with heavy rains, caused the Hudson and East Rivers to flood the streets of Lower Manhattan—right where DTCC’s Water Street offices and vault were located. “There were many predictions on the storm’s trajectory and we assessed the impact it could have on our operations,” Bodson said. “Unfortunately, it turned out to be a once-in-a-generation storm.” The irony of DTCC’s Water Street address quickly became apparent as the building’s lobby flooded with five feet of water. “It didn’t take long for us to realize, if the lobby is at five feet, what does that mean for the concourse and the first and second sublevels?” said James Femia, a former managing director in Global Business Operations and, at the time, the senior officer in charge of the vault. As the water began to rise, security guards who had remained behind were providing updates. Three guards were responsible for shutting the vault doors and monitoring to see if the water was coming in. Once the water breached the sandbags in the lobby and started pouring in, everything flooded. “Two guards went upstairs and realized that the third guard was missing,” Bodson said. “They started going back downstairs. The building’s guards told them not to risk their lives, but they went down there anyway and found the third guard. He was trapped near the vault.” The guard pushed a desk against the wall and his fellow guards were able to save him by pulling him out of the room where he was located. “By the time the guards were leaving the vault area, the water was up to their chests,” Bodson said. “They saved the life of that one individual.” For DTCC, there was no way to retrieve the certificates valued at more than $1 trillion housed within the flooded vault. The firm quickly got to work to
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