Former Vesttoo CEO Yaniv Bertele — LinkedIn
Aon, a major brokering firm, acknowledged that it needed to pay out $197 million to cover settlements related to civil suits leveled against the troubled Israeli insurtech startup Vesttoo. The settlements were related to what were determined to be fraudulent letters of credit used by Vestoo.
Aon revealed this in its Q4 2023 report.
In September, two of the founders of Vesttoo, Yaniv Bertele and Alon Lifshitz, were ordered by a Tel Aviv court to hand over about $30 million of the funds that the company seeks to recoup from the duo. The firm had filed court motions in an attempt to get back more than $200 million from Bertele and Lifshitz it says the two earned illegitimately, as well as another $65 million from former Vesttoo execs Udi Ginati and Josh Rurka.
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Just a few weeks before that, the two were both fired by the company’s board of directors in the wake of the fraud scandal.
In July it was reported that Vesttoo investors allegedly provided fake letters of credit (LOCs) to insurers for reinsurance transactions on the Vesttoo platform are believed to total a sum of around $4 billion. Most of these letters reportedly came from what was described as a leading Chinese bank, which appears to have been unaware of the situation.
“We strategically wanted to draw a line under this issue for our market partners and for ourselves, so that we were able to move forward together as partners,” Eric Andersen, President of Aon, said during the firm’s earnings call.
“In the fourth quarter of 2023, Aon recognized actual or anticipated legal settlement expenses in connection with transactions for which capital was arranged by a third party, Vesttoo Ltd., primarily in the form of letters of credit from third party banks that are alleged to have been fraudulent,” said AON in a statement.
“Certain actual or anticipated legal settlement expenses totaling $197 million have been recognized in the current period, where certain potentially meaningful amounts may be recoverable in future periods.”
Vesttoo recently saw its value plummet and it closed offices and let go, overall, about 75% of its staff. The company is now reportedly seeking Chapter 11 bankruptcy protection.
Vesttoo first hit the coveted unicorn status in October of 2022 when the firm raised $80 Million in a Series C financing round that left it with a $1.1 billion valuation. And it was just this past May that the firm hit a valuation of as much as $2 billion.
Founded in 2018 by CEO Yaniv Bertele, CPO Alon Lifshitz, and CTO Ben Zickel, Vesttoo specializes in data-driven risk management solutions for the P&C and longevity markets, using “cutting-edge technologies to transfer General Insurance, Lapse, and Longevity risk to the capital markets.” Vesttoo declares that it provides insurers and pension funds with low-cost, strategic risk transfer to the capital markets, while investors benefit from correlated, high-yield investments with remote loss possibilities.
