Personal Profit Exclusion

Disgorgement Not Always Uninsurable: New York Trial Court Holds Bear Stearns’ 2006 “Disgorgement” Payment to SEC Covered Loss

Male judge in a courtroom striking the gavel,working with digital tablet computer docking keyboard on wood Disgorgement Not Always Uninsurable: New York Trial Court Holds Bear Stearns’ 2006 “Disgorgement” Payment to SEC Covered Losstable, filter effect

The New York Supreme Court disposed of a longstanding dispute between J.P. Morgan and the insurers of the now defunct Bear Stearns, rejecting the insurers’ various arguments to avoid indemnity coverage for a $160 million payment made by Bear Stearns in connection to a 2006 settlement with the Securities and Exchange Commission (“SEC”) and New York Stock Exchange. As previously discussed in our August 2016 post about the prior motion for summary judgment order in this case, that settlement resulted from allegations that Bear Stearns, through its brokers, had facilitated late trading and deceptive market timing practices.

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