Capco, who insures deep pocket investors against the collapse of a brokerage firm, may be facing $11 billion in claims over the fall of Lehman with only $150 million to pay it with.
If Capco can’t pay out the claims and files for bankruptcy, several customers said they would bring lawsuits against the other brokerage houses.
“The bottom line is, this insurance should have never been sold to clients, and it just shows how Wall Street again miscalculated the risks involved with one of their own going under”
Capco is owned by Goldman (of course), Morgan Stanley, Fidelity and others and runs 185 businesses out of a tiny office in Vermont where they enjoy state laws that don’t require them to report much. How cozy. And who would have ever thought they’d actually have to pay a claim. Apparently they didn’t.
Oh, five more banks failed today and were seized by the FDIC.
Interesting that 1/3 of the banks that failed in July were in GA. What’s that about?
They were all part of the same holding company