The United States District Court for the Southern District of New York has denied an insurer’s motion to dismiss coverage litigation, holding under New York law that a run-off D&O policy’s subsequent acts exclusion does not bar coverage for an underlying securities class action. See AmTrust Financial Services, Inc. v. Forge Underwriting Ltd., 2026 U.S. Dist. LEXIS 53034 (S.D.N.Y. Mar. 13, 2026).
The exclusion provides that “[n]o coverage will be available under this Policy for any Claim based upon, arising out of, directly or indirectly resulting from, in consequence of, or in any way involving any Wrongful Act committed or allegedly committed on or after November 29, 2018.” The policy defines Wrongful Act to mean “any actual or alleged act, error, omission, misstatement, misleading statement, neglect, or breach of duty by an Insured Person while acting in his or her capacity as such or due to his or her status as such,” or “any actual or alleged act, error, omission, misstatement, misleading statement, neglect, or breach of duty by the Company.”
The underlying lawsuit alleged securities fraud based on statements that the insured company would maintain certain preferred stock listed on the NYSE following a November 29, 2018, transaction otherwise taking the company private. Approximately two months after the transaction, the company made a corrective disclosure, announcing that it would delist all of its stock. The company delisted the stock a few weeks later.
The court found the subsequent acts exclusion inapplicable because delisting the company’s stock—which was the only alleged event after the exclusion’s November 29, 2018, cut-off—was a lawful corporate act and thus not a “Wrongful Act” under the policy. The court determined that “[a]s a matter of plain text, ‘Wrongful Act’ and the listed examples suggest exactly that: an action that was unlawful.” Because the delisting was not unlawful, the court ruled that the underlying action did not allege any Wrongful Act on or after November 29, 2018, to trigger the exclusion.