Insurer Doesn't Owe Coverage To Fraudster: 8th Circ.

Law360, New York (February 28, 2012, 6:01 PM EST) -- The Eighth Circuit ruled Tuesday that Quanta Specialty Lines Insurance Co. does not have to pay defense costs for a Nebraska broker-dealer convicted of securities fraud for swindling investors out of more than $20 million.

Brian Schuster claimed that Quanta breached the terms of a $1 million professional liability policy issued to Capital Growth Financial LLC in bad faith when it refused to represent and indemnify him in 16 underlying arbitrations and two underlying suits after the policy's limit was exhausted.

Schuster, who was registered as...
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