On Wednesday, September 25, 1:00pm-2:30pm EDT, Partner Mikaela Whitman will be speaking in a Stafford live webinar, “Insurability of Disgorgement and Restitution Claims After Kokesh, TIAA-CREF, and J.P. Morgan.”
Whether there is insurance coverage for disgorgement or restitution of purported “ill-gotten gains” under D&O and other professional liability policies is becoming a more pervasive issue in jurisdictions across the country. The increased filings of consumer and securities class actions, breach of fiduciary duty actions, SEC enforcement actions, and appraisal actions have fueled this judicial debate.
The Supreme Court’s unanimous decision last year in Kokesh v. SEC, which held that SEC disgorgement is an uninsurable “penalty,” has had far-reaching implications for insurance practitioners. Some lower courts have since followed suit but in In Re: TIAA-CREF Insurance Appeals, the Delaware Supreme Court held that settlement of a civil lawsuit involving claims for disgorgement was an insurable loss under New York law. These cases provide valuable guidance on how counsel–and courts–should approach coverage disputes over disgorgement claims.
The webinar panel will discuss whether insurance policies provide defense and indemnity coverage for restitution or disgorgement of “ill-gotten gains”–an issue that continues to challenge policyholders, insurers, and courts nationwide. The panel will provide practical guidance gleaned from recent seminal decisions and explain the most compelling arguments for and against these claims, ranging from broad public policy considerations to close reading of exclusions.