Bankman-Fried files suit as CNA balks on defence costs from D&O policy
Sam Bankman-Fried, founder of the defunct crypto exchange FTX and associated trading firm Alameda Research, has filed suit against CNA for failure to cover his rising legal defence bills under terms of his D&O coverage.
The CNA Policy was supposed to be the second-layer excess policy in the D&O insurance tower to Bankman-Fried's empire, which collapsed in 2022 amid allegations that crypto investor funds were diverted for other purposes.
The CNA Policy provides a $5 million limit of liability, which attaches upon exhaustion of the $10 million in aggregate limits of the underlying insurance. That tower begins with $5 million in primary coverage from Beazley 2623 and 0623, then a $5 million first layer of excess coverage from QBE.
Beazley and QBE “have acknowledged the Policy’s unambiguous requirements and paid out defence costs on a current basis as incurred,” the complaint to the US federal court declares.
Bankman-Fried is seeking a court injunction forcing payment of benefits plus compensatory damages and punitive damages of a to-be-determined sum.
Bankman-Fried is a defendant in an ongoing, complex criminal trial relating to alleged conduct at his companies. A second trial against him is scheduled for March 2024, and he is further involved in more than a dozen civil and regulatory actions relating to FTX, the legal complaint noted.
Court records did not yet show any defence response from CNA within the first days following the initial filing.
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