Aon subsidiary is taking Chinese lender to court over Vesttoo fraud

Aon subsidiary White Rock has sued China Construction Bank (CCB) for its “direct role” in the letters of credit (LOCs) scandal that led to the collapse of insurtech Vesttoo.

Filed in New York State Supreme Court, White Rock's $140 million lawsuit against the Chinese lender includes fraud, fraudulent misrepresentation, fraudulent concealment, negligent misrepresentation, and negligence as causes of action.

The AM Best report quoted part of the file as saying: “It's not that Vesttoo simply used the CCB logo on a fake document and White Rock took their word for it. Instead, the insider at CCB – the actual CCB bank acting for CCB as the relationship manager – represented to White Rock, its auditors, and other market participants that the LOCs were genuine.”

LOCs, which are used to secure insurance transactions, end up being dishonored. A series of falsified documents allegedly from CCB, a division of Aon that denies its involvement, caused the cedents to lose at least $140 million paid to White Rock cells.

“Vesttoo turned out to be a fraud, funded by over $3 billion in worthless securities,” reads part of the complaint, as reported by Artemisi. Of this amount, more than 2.8 billion rands are linked to CCB.

Meanwhile, a White Rock spokesperson announced: “White Rock's lawsuit against China Construction Bank is another step in our efforts to increase recovery for customers affected by Vesttoo fraud.

“The China Construction Bank's direct role in the issuance of fake credit letters has led to the fraud, and the bank should be held accountable for the damages it has caused.”

In addition to the cedents' losses, the damage included White Rock's placement in foreclosure proceedings by the Bermuda Monetary Authority.

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