Investigation ends of market’s activities in the US without bringing any charges



Title: Lloyd’s Says U.S. Closes Probe With No Charges

Source: Bstwire: na, November 21, 2001

Publisher: A. M. Best Co. Inc.





By: Brendan P Noonan


LONDON (BestWire) - Lloyd’s said federal prosecutors have ended an investigation of the market’s activities in the United States without bringing any charges.


The probe grew out of allegations by U.S. investors, or Names, who claimed that they had been duped in connection with their backing of underwriting syndicates in the London-based insurance market. They alleged that the scheme included the use of the U.S. mail to send fraudulent materials.


The market said on Nov. 21 that the U.S. Attorney’s Office for the Southern District of New York told Lloyd’s it had closed its investigation. Lloyd’s said it “has always cooperated fully with the USAO and is delighted by the outcome.”


Some U.S. Names have fought a long and bitter battle with Lloyd’s after suffering heavy losses in the market. They have tried to have their cases heard in U.S. courts, contending that the market engaged in securities fraud, but several courts have upheld the “forum selection clause” under which U.S. Names agreed to have disputes with Lloyd’s heard in English courts.


Among the Names’ recent defeats was the removal from a bankruptcy bill of a provision that would have opened the door for U.S. Names to air their fraud allegations in U.S. courts (BestWire, March 16, 2001). The provisions could have hindered Lloyd’s efforts to collect the U.S. members’ debts to the market.