Nasdaq insurers continue battle over coverage of Nasdaq’s $31 million dollar settlement of an investor class action over the botched Facebook initial offering.
In 2012, with the initial public offering of Facebook, came technical problems which delayed trading on the IPO. Nasdaq settled claims by investors that it knew of the technical vulnerability and that it would be unable to properly handle the trading volume that was expected.
Beazley, Nasdaq’s first level errors and omissions insurer dished out $15 million dollars to fund part of the settlement and now seeks to recoup that amount from Ace and Illinois National Insurance, Nasdaq’s directors and officers liability carriers.
In the case pending before the Honorable Jed S. Rakoff in the Southern District of New York, Ace moved for summary judgment relying upon the professional services exclusions in its policy.
We will continue to follow for the decision.
See Beazly v. ACE and Illinois Mutual, 1:15-cv-05119 (Southern District of New York)
By Rosa M. Feeney, Esq.