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You are here: Home1 / Insurance Law2 / DEFENDANT COMMODITY FUTURES BROKER IS ENTITLED TO COVERAGE UNDER FIDELITY...
Insurance Law, Securities

DEFENDANT COMMODITY FUTURES BROKER IS ENTITLED TO COVERAGE UNDER FIDELITY BONDS FOR LOSSES INCURRED BY THE CRIMINAL ACTIONS OF A BROKER AMOUNTING TO $141 MILLION (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, in a full-fledged opinion by Justice Kapnick, determined defendant MF Global was entitled to coverage under fidelity bonds for losses incurred by the criminal actions of a broker, Dooley, for which Dooley was ordered to pay restitution to MF Global in the amount of $141 million:

This 2009 declaratory judgment action involves a $141 million insurance coverage dispute between plaintiffs New Hampshire Insurance Company, Liberty Mutual Insurance Company, and Axis Reinsurance Company (Insurers) and defendant, commodity futures broker MF Global Finance USA, Inc. (MF Global). New Hampshire issued the primary bond insurance policy to MF Global’s predecessor and Liberty Mutual and Axis Reinsurance each issued excess financial institution bonds, covering the same policy period and incorporating the provisions and terms of the primary bond. Defendant MF Global seeks coverage under those bonds for a trading loss incurred in February 2008 by Evan Brent Dooley, a broker for MF Global, who in 2012 pleaded guilty to exceeding speculative position limits in violation of 7 USC §§ 6a and 13(a)(5). Dooley was sentenced to five years’ imprisonment and one year of supervised release and was ordered to pay restitution of over $141 million to MF Global upon release from prison.

… [W]e hold that defendant is covered under the fidelity bonds for its loss and is entitled to summary judgment in its favor…. . New Hampshire Ins. Co. v MF Global Fin. USA Inc., 2022 NY Slip Op 01880, First Dept 3-17-22

 

March 17, 2022
Tags: First Department
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https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png 0 0 Bruce Freeman https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png Bruce Freeman2022-03-17 16:08:402022-03-18 18:21:13DEFENDANT COMMODITY FUTURES BROKER IS ENTITLED TO COVERAGE UNDER FIDELITY BONDS FOR LOSSES INCURRED BY THE CRIMINAL ACTIONS OF A BROKER AMOUNTING TO $141 MILLION (FIRST DEPT).
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