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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: scion who wrote (105785)	1/16/2009 9:45:54 AM
From: scion	Respond to of 122087

Aon estimates Madoff’s alleged Ponzi scheme could cost insurers billions by Stefan Maisnier Jan 15, 2009 news.medill.northwestern.edu Chicago-based Aon Corp. estimated the insurance industry’s range of direct insured losses will likely be between $760 million and $3.8 billion from Bernard Madoff’s alleged Ponzi scheme, with the maximum potential exposed insurance limits at more than $6 billion. The most likely loss will be $1.8 billion, the reinsurance company said in a press release late Wednesday. Aon prepared an industry-wide analysis using information on estimated investment losses from Bloomberg News and The Wall Street Journal, among other sources. Assuming 100 percent liability for all parties, Aon estimated the insurance loss will total $6.44 billion. The study found it unlikely, however, that every insurer will be held fully accountable for all losses to investor funds under their care. Aon spokesman David Prosperi said he was unaware of any Aon insurance policies involved in the Madoff scheme, and that the company conducted the industry analysis as a way “to serve clients.” Prosecutors allege that Madoff, the founder of Bernard L. Madoff Investment Securities LLC, didn’t disclose his losses in the markets and instead paid some investors returns using the money he got from other investors. The Aon study identified litigation stemming from the Madoff scandal as the source of inevitable claims against insurance companies who write directors and officers, errors and omissions and fidelity coverages. Seven federal securities class action lawsuits have already been filed, according to Aon. Directors and officers coverage is insurance for public entity chairpersons, directors and officers that protects them from being held liable for company actions and policies. Errors and omissions coverage is an expansion beyond company directors and officers to more of the company, protecting the insured from errors and omissions. Fidelity coverage protects companies and investors from dishonest acts by employees. The study split the parties involved in the Madoff scheme into four categories: asset management firms, foreign banks and insurers, charities and Bernard L. Madoff Investment Securities. Taking into consideration a variety of litigation outcomes, Aon gave best estimates of insurance losses of $371 million to asset management firms, $1.46 billion to foreign banks and insurers, and $6.2 million to charities, for a total of $1.84 billion. Aon’s study did not give an estimate of insurers' losses to Bernard L. Madoff Investment Securities or factor those possible losses into the total. Asset management firms and foreign banks and insurers were identified as having high possibilities of errors and omissions claim exposure, medium directors and officers exposure, and low fidelity exposure. Asset management firms and foreign banks that placed investor money into Madoff funds will likely present the most significant risk of insurance claims since there are many questions about whether or not these firms performed their due diligence before investing with Madoff, according to the study. Charities are unlikely to pose a large claim risk in any of the product categories, although it is possible disgruntled donors may sue the boards for not performing proper diligence on investments. The companies most at risk are insurers of Bernard L. Madoff Investment Securities , which will be highly exposed through all three product lines, according to Aon. news.medill.northwestern.edu

To: scion who wrote (105785)	1/16/2009 12:15:26 PM
From: scion	Respond to of 122087

UBS Told to Return French Firm's Funds JANUARY 15, 2009, 9:35 P.M. ET By DAVID GAUTHIER-VILLARS online.wsj.com PARIS -- A Luxembourg court ordered the local branch of Swiss bank UBS AG to pay French financial firm Oddo & Cie. €30 million ($39.5 million), money that had been invested on behalf of clients with disgraced financier Bernard Madoff. The ruling hinged on a request Oddo made in early November to withdraw money from a fund exposed to Mr. Madoff, more than a month before Mr. Madoff's alleged Ponzi scheme became public. That means the ruling is unlikely to set a precedent for investors who hadn't made such a request. Oddo had invested €30 million in Luxalpha Sicav, a Luxembourg fund set up by UBS in 2004 to route money to Mr. Madoff. UBS created the fund in partnership with Thierry Magon de La Villehuchet, a French fund manager who committed suicide at his New York office Dec. 23. But in early November, the French firm decided to pull out of Luxalpha because it thought the fund lacked transparency, an Oddo spokesman said Thursday. The Luxembourg court said UBS had handled Oddo's request with a "recalcitrant attitude" and must pay a further €10,000 compensation on top of the €30 million. A UBS spokeswoman said the bank would comply with the ruling. In Luxembourg, the government and a group presenting the fund-management industry said the court ruling underscores the importance of investor rights. "This shows our judicial system works," said Lucien Michels, a spokesman for the Luxembourg Treasury. The Commission de Surveillance du Secteur Financier, the Luxembourg financial regulator, has said it has launched a probe of fund managers, auditors and others involved in the Madoff investment. The regulator has pegged the exposure of the country's fund-management industry to Mr. Madoff at €1.9 billion. That represents only a small portion of the €2.06 trillion that were managed by funds domiciled in Luxembourg as of late 2007. But country authorities fear that the Madoff scandal has the potential to harm Luxembourg's reputation as a financial center. Lawyers representing dozens of French investors who lost money with Mr. Madoff via UBS's Luxembourg branch and other Luxembourg entities said they would meet Friday in Paris to coordinate possible further legal action. Charles Muller, deputy director of the Association of the Luxembourg Fund Industry, said that Thursday's court ruling was a signal to "investors who feel they have suffered prejudice that they can bring their cases to our courts and obtain compensation." Write to David Gauthier-Villars at David.Gauthier-Villars@wsj.com online.wsj.com