As the investigation into allegedly fraudulent letters of credit (LOC) continues, Vesttoo has released a statement noting it will be letting go of some of its employees, as the firm focuses on regaining its footing and “emerging from this challenge stronger than before.”
According to Vesttoo, it is conducting a “rigorous” internal and external analysis of the events leading up to the first report of a fraudulent LOC.
“We have engaged an experienced global risk, audit and compliance expert and external attorneys to advise us throughout this process,” the firm said in a recent statement.
Vesttoo continued, “In order to solidify the foundation of the company and reassure the industry, leadership must return its focus to core services while reducing overall costs, including parting ways with some of our employees.
“These are painful, but important decisions that we must make at this time. Our focus remains on regaining our footing and emerging from this challenge stronger than before.
“We thank those who are leaving us for their contributions and will be working to support them through this transition.”
Reinsurance News understands that these layoffs will involve a large portion of the global Vesttoo workforce and that it will be across the board, with all teams and geographies affected.
Israeli media Calcalist has reported that the number of layoffs could total 150, representing around 75% of the company.
In related news, Aon recently disclosed that it may be facing legal action over certain LOCs related to the Vesttoo collateral investigation, though the re/insurance broker has noted that it has “meritorious defences” and intends to “vigorously defend itself” against any claims.
Meanwhile, specialty non-catastrophe focused collateralized P&C reinsurer Corinthian Group has agreed to terms on a letter of intent with a large investor for funds of up to $200 million to replace LOC collateral linked to insurtech Vesttoo.
