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  • Superior Court of Arizona, Maricopa County
  • Non-Party Insurance Syndicate
  • Andrew L. Margulis, Eric C. Weissman
  • Frank Selna, an employee of the insured, devised a Ponzi scheme to defraud over 25 investors out of millions of dollars by recommending that they invest in fictitious investment vehicles. These investors filed suit against a number of defendants, including the insured, alleging various causes of action including fraud, conversion and negligent misrepresentation. Based on our review of the allegations in the complaint, we recommended that the client issue a comprehensive reservation of rights letter to the insured noting that Insuring Agreement A - Fidelity, of the applicable policy, was potentially implicated. The reservation of rights letter also stated that certain exclusions were applicable that would limit the amount of Loss subject to coverage.

  • On behalf of the insurer and in a coordinated effort with the insured, we participated in a mediation in which a "global" settlement between the parties was effectuated and also successfully saved the client over 80% of the available limits of liability.