Disgorgement Payments to the SEC are Not an Insurable Loss Under New York Law

On December 14, 2011, the New York State Appellate Division, First Department dismissed an attempt by Bear Stearns & Co. and Bear Stearns Securities Corporation (together, Bear Stearns) to claim disgorgement payments to the Securities and Exchange Commission (SEC) as an insurable loss.  See generally “Hedge Fund D&O Insurance: Purpose, Structure, Pricing, Covered Claims and Allocation of Premiums Among Funds and Management Entities,” Hedge Fund Law Report, Vol. 4, No. 41 (Nov. 17, 2011).

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