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Old 08-01-2009, 10:15 AM
 
Location: Great State of Texas
86,052 posts, read 84,222,269 times
Reputation: 27718

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Interesting article on some obscure firm that insured against investment banks going belly up. They didn't even cap what could be insured and paid out should a firm go belly up. They originally were located in NY but when the NY regulators started questioning them they uped and moved to VT.


This will be interesting to watch unfurl

Billions in Lehman Claims Could Bury an Elusive Insurer - Companies * US * News * Story - CNBC.com

"Next to a Chinese restaurant in Burlington, Vt., lurks a quiet guardian of Wall Street — an obscure insurance company that is supposed to protect big-money investors in the event of a catastrophic failure of a major brokerage firm.
..
Capco was created in 2003 by Lehman and 13 other banks and brokerage companies as a kind of marketing tool. The pitch was that while Capco would not insure customers against investment losses, it would compensate them if the firms failed. Capco promises to provide virtually unlimited coverage above the $500,000 offered by the Securities Investors Protection Corporation and its equivalent in Britain."


It is estimated that Lehman losses could be in the tens of billions and here's this firm with $150 million that S&P rated pretty high until recently. In Feb S&P dropped it altogether.
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Old 08-01-2009, 07:32 PM
 
12,867 posts, read 14,869,886 times
Reputation: 4459
the broker/dealers that received CAPCO's Excess SIPC protection are:

Credit Suisse Securities (USA) LLC
Edward D. Jones & Co. L.P.
J.P.Morgan Clearing Corp.
National Financial Services LLC
Goldman Sachs & Co.
Goldman Sachs Execution & Clearing, L.P.
Lehman Brothers Inc. (which went belly up)
Neuberger Berman LLC
Morgan Stanley & Co., Inc.
Raymond James and Associates
Ridge Clearing & Outsourcing Solutions, Inc.
Robert W. Baird & Co.
Pershing LLC (tied to the stanford fraud)
First Clearing, LLC
Wachovia Securities, LLC

Last edited by floridasandy; 08-01-2009 at 07:41 PM..
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Old 08-02-2009, 01:15 PM
 
Location: Backwoods of Maine
7,486 posts, read 10,445,399 times
Reputation: 21460
Capco is owned, pretty much, by the companies that it insures. That speaks volumes.

The fact that they moved to VT from NY, as soon as an audit was mentioned, also speaks volumes.
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