The impact on the errors and omissions insurance sector from the Bernard Madoff Ponzi scheme scandal will be astronomical and worldwide, according to an E&O specialist.
Jonathan Legge, a managing director with Mercator Risk Services, said the reverberations will likely register as investment advisors and banks that invested clients' money through Mr. Madoff are hit with actions by investors.
Mr. Legge said insurers initially may have been looking at their exposure to Mr. Madoff specifically, but now they are finding that many big investment advisors, funds and banks had significant money from clients invested through Mr. Madoff. Some had as much as 40 percent of their clients' money invested through Mr. Madoff, said Mr. Legge.
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