Insurance recovery matters arising from securities fraud and financial crime typically follow the discovery that an investment advisor, fund manager, broker-dealer, or financial institution engaged in fraudulent conduct that caused substantial losses to investors, counterparties, or the institution itself. The affected parties — which may include individual investors, pension funds, institutional allocators, feeder funds, or the defrauded entity’s own estate — must then identify and pursue all available insurance coverage to maximize recovery in an environment where the wrongdoer’s assets have been depleted, frozen, or placed under court-supervised administration.

The insurance programs implicated in these matters are diverse and often stacked across multiple carriers and policy years. Directors and officers liability policies, professional liability coverage for auditors and fund administrators, fidelity bonds, and financial institution bonds may each provide a separate basis for recovery. Carriers frequently resist these claims by invoking fraud exclusions, prior knowledge provisions, regulatory action exclusions, or arguments that the insured’s losses arise from investment risk rather than covered wrongful acts — defenses that require careful factual and legal analysis to overcome.

• Pursuit of D&O, professional liability, and fidelity bond recoveries for losses caused by Ponzi schemes and investment fraud
• Claims against auditor and fund administrator professional liability policies for failures in fraud detection and due diligence
• Challenges to carrier denials based on fraud exclusions, prior knowledge defenses, and insured-versus-insured provisions
• Recovery actions coordinated with SEC enforcement proceedings, DOJ criminal investigations, and bankruptcy trustee clawback litigation
• Prosecution of bad faith and breach of contract claims against carriers that unreasonably delay or deny coverage for fraud-related losses