A “dishonest acts” exclusion clause in its liability policies does not exempt insurers from covering a $250 million settlement reached between the Securities and Exchange Commission and a J.P. Morgan subsidiary, a Manhattan state judge ruled.
In J.P. Morgan Securities v. Vigilant Insurance, 600979/2009, Justice Charles Ramos (See Profile) held that a clause preventing coverage for “any deliberate, dishonest, fraudulent or criminal act or omission” established by a “judgment or other final adjudication” would not apply because the SEC settlement order did not constitute a judgment.
