As insurtech Vesttoo continues its investigation into the alleged fraudulent letters of credit (LOCs) used as collateral in its transactions, the firm has reiterated its commitment to “working with alternative investors and brokers to ascertain alternative collateral” for its clients.
A statement released by the company says that it is in “active discussions with potential investors” for the purpose of obtaining alternative collateral.
Vesttoo’s “rigorous” investigation into the suspected fraud continues, explains the Board, adding that it’s “fully cooperating with all parties investigating the matter.”
“The company can confirm that standard KYC (“Know Your Customer”) was conducted on all parties internally as well as by external organizations,” says the firm.
The saga began when Israeli tech publication, Calcalist’s CTech, reported that the insurtech was being investigated after the discovery of billions of dollars in fraudulent collateral.
It has since become clear that the alleged fraud relates to LOCs posted to back reinsurance transactions facilitated by Vesttoo, although exactly where and how this happened remains uncertain.
It’s a complex issue, and as noted by specialty non-catastrophe focused collateralized P&C reinsurer, Corinthian, could take months to resolve.
This latest statement from Vesttoo comes after reports it was set to let go of a substantial portion of its workforce, with the firm later confirming that it is considering the removal of two of its co-founders who are now on paid leave.
“While the company has lost a significant amount of senior executives, it retains a very experienced and committed core team of more than 50 people who are focused on working with the markets to resolve these issues and is actively corresponding with the various regulatory bodies worldwide regarding the situation, as well as harnessing our technological suite and platform to find potential solutions.
“Vesttoo and its board of directors confirm once again that the company will meet all of its commitments to suppliers and consultants,” reads the latest statement.
