Disgorgement Payment To SEC Does Not Constitute Insurable Loss, N.Y. Panel Rules

NEW YORK - A disgorgement payment to the Securities and Exchange Commission in settlement of allegations of illegal mutual fund trading practices does not constitute a covered loss under primary and excess professional liability insurance policies, a New York appeals panel ruled Dec. 13, reversing a lower court's ruling denying the insurers' motion to dismiss a breach of contract complaint against them (J.P. Morgan Securities Inc., et al. v Vigilant Insurance Company, et al., No. 600979/09, 4899, N.Y. Sup., App. Div., 1st Dept.; 2011 N.Y. App. Div. LEXIS 8829). Full story on lexis.com