A new statement from the incoming interim CEO of Vesttoo, Ami Barlev, claims that the company has now learned that “a number of factors, external to the company, led directly to the current crisis, including the involvement of certain foreign banks and financial institutions.”
Barlev was named as interim Chief Executive Officer (CEO) earlier this week, as Vesttoo replaced its top leadership, after co-founders of the company, Yaniv Bertele and Chief Financial Engineer, Alon Lifshitz, were placed on paid leave until a final decision is taken.
The first statement from Barlev suggests findings from an audit and investigation at the company has found that external factors were a driver of the crisis, with the finger pointed at banks and financial institutions. It’s not clear at this stage whether this includes investors potentially behind the allegedly fraudulent letters-of-credit (LOCs).
Barlev’s statement reads, “During the last few weeks, Vesttoo has been conducting an in-depth investigation, carried out by one of the leading world-class forensic investigation experts in conjunction with a leading international law firm engaged by Vesttoo’s independent ad hoc committee. The investigation is supervised by this ad hoc committee which is comprised of independent directors who are not part of the Company’s management. The investigators have presented initial conclusions and recommendations which have been adopted in full.
“We have learned that a number of factors, external to the company, led directly to the current crisis, including the involvement of certain foreign banks and financial institutions.”
He continued to explain, “Vesttoo has also initiated immediate changes in its management, removing some individuals from their positions, also as a result of the findings.
“We have also unfortunately had to let many talented people go from the company, as a result of the damage caused. These steps were taken only to secure the financial viability of the company and not as a result of the findings.”
Concluding, “We will decisively pursue legal actions against all parties who caused harm to the Company and its clients, and will take all necessary steps to recover all and any damages, and we will vigilantly protect our partners, customers and our employees.
“At this stage, we can firmly assure that Vesttoo’s remaining core team of professionals, who are of the highest caliber globally in the fields of insurance, capital markets and technology, are free of any suspicion, and our company continues to operate because of these talented individuals. We thank everyone who continues to support us.
“Vesttoo has tightened its KYC procedures and is adopting stringent legal procedures aimed at increasing the level of corporate governance and business integrity at the Company.
“We will demonstrate zero tolerance towards any violation of law and pursue legal actions against any party that caused damage to the Company in the most assertive manner.”
As we also reported this morning, broking giant Aon is pursuing the beleaguered insurtech Vesttoo through a New York Court via its White Rock Insurance (SAC) Ltd. segregated account and transformer structure, and has so far secured a temporary restraining order to freeze Vesttoo’s funds.
Identifying the source of any fraud that has occurred remains paramount and so far this is still unclear, with those involved in the reinsurance deals affected having stated that KYC was followed and checks made on collateral letters-of-credit (LOCs) with the banks involved.
This new statement from the interim CEO of Vesttoo suggests looking outside the company for wrongdoing, but stops short of explaining precisely where the insurtech feels any blame lies.