SEC Settlement Is Not “Loss,” But a “Penalty”
D&O/FI insurers have seen a rise in SEC enforcement actions against their insureds. With limited arguments against coverage for outsized settlements, several of these insurers have been significantly on the hook for their insureds’ misdeeds.
In this article, Wilson Elser partner Jim Thurston discusses options available to U.S. insurers in managing governmental settlements. His perspectives are informed by seminal cases J.P. Morgan Sec., Inc. v. Vigilant Ins. Co. and Kokesh v. Securities Exchange Commission. Jim’s conclusion parses the nuances of what constitutes a “penalty” or “loss” under D&O policies. The distinction is critical.
The views and opinions expressed in this material are those of the authors and may not reflect the official position of the other Legalign Global member firms or their lawyers.