Lloyd's Of London Is Under Siege
Fabled Lloyd's of London finds itself under attack on many fronts. A dozen investors in the underwriting syndicates that make up Lloyd's have filed suits trying to stop it from tapping into their capital to cover $4 billion in losses racked up over the past three years. In the suits, many individual investors charge that Lloyd's favored insiders, such as brokers and underwriters, who kept the best business to themselves.
The disputes could undermine Lloyd's ability to raise capital and take on new risks. Unless an investigation by an independent regulator, Sir David Walker, clears the air, the government may be forced to step in to restore investor confidence. And Lloyd's may have to go to private banks or outside investors to head off a liquidity squeeze.