Ninth Circuit Holds That Claims Aren't "Related" For E&O Purposes
The Ninth Circuit has ruled that a California District Court erred in holding that investors suits against a fund manager were barred from coverage as being “related” to claims that other investors brought against the insured prior to the date that AISLIC’s “claims made” Investment Managers policy. In Financial Managers Advisors, LLC v. American International Specialty Lines Ins. Co., No. 06-55001 (9th Cir. November 5, 2007), the court held that the newer claims involved new claimants and different “wrongful acts.” As a result, even though the new claims involved allegations of fraud and misrepresentation involving the same investment vehicles as was at issue in the earlier case, the court ruled that it did not believe that “the term ‘related’ was intended to bar recovery where two investors are advised to invest in the same fund.”
