A New York State Appellate Court ruled that disgorgement paid pursuant to an SEC settlement order is not an insurable claim, even without an admission of wrongdoing.  The plaintiff in the case sought reimbursement from its insurance carrier of $160 Million paid as disgorgement to settle charges that it assisted illegal market timing.  The plaintiff argued that the insurance company was obligated because the plaintiff never admitted wrongdoing.  The Court disagreed, stating that under New York law “the risk of being directed to return improperly acquired funds is not insurable” primarily because of the public policy to deter wrongdoing.  The fact that the plaintiff did not admit wrongdoing was irrelevant because the SEC cited several violations of the securities laws, and the insurer was not required to specifically trace the disgorgement monies to specific acts.