Embattled Israeli insurtech Vesttoo Ltd has blamed the unravelling of the company on its own executives, alleging conspiracy amid a culture of pervasive and systemic misconduct.

This comes in the wake of the company filing a first interim report with the United States Bankruptcy Court for the District of Delaware.

Vesttoo said it would work with the relevant parties in Bermuda and elsewhere as quickly as possible to address outstanding issues.

Earlier, the Bermuda Monetary Authority and White Rock Insurance (SAC) Ltd. sought joint provisional liquidators in the winding up of Vesttoo Bermuda. And later Markel Bermuda joined the statutory committee of unsecured creditors in the Delaware bankruptcy.

The interim findings, a company statement said, have identified that pervasive and systemic misconduct was engaged in by a limited set of Vesttoo executives and other third parties.

It said: “This misconduct was shielded from the majority of Vesttoo’s employees, the board of directors and the insurance markets.”

The lengthy statement, issued through a publicity consultant, quoted Vesttoo’s interim chief executive Ami Barlev: “The investigation has confirmed that this scheme was confined to the following Vesttoo executives – Yaniv Bertele (former CEO), Alon Lifshitz (former chief financial engineer), Udi Ginati (former senior director, capital markets) and Josh Rurka (former senior director, Asian markets), who acted with external entities such as employees of China Construction Bank and Standard Chartered.

“While we obviously remain very troubled by the misconduct of those that the company and markets placed great trust in, we are pleased that the investigation has confirmed that this scheme was confined to a small subset of the Vesttoo leadership team.

“The company’s technology platform and its core value remain strong and we intend to use it and our deeply experienced insurance professionals to emerge from this process as a trusted partner.”

The Vesttoo statement said the report was prepared to provide an update on the four core objectives of the bankruptcy cases:

1, Identify the root cause of the company’s collapse through a comprehensive internal investigation

2, Establish a process to pursue those individuals and entities that had caused the harm to Vesttoo

3, Create institutional controls to address those shortcomings found in the company’s ongoing investigation and provide timely information to regulators throughout the world

4, Reformulate the company’s strategic business plan

The statement further claimed: “With regard to the investigation, the report highlights the full and transparent investigation commenced at the direction of a special committee of the Vesttoo board of directors almost immediately after the allegations related to the letters of credit used on Vesttoo’s platform surfaced.

“Throughout the investigation, the investigation team was given unfettered access to company documents and systems, as well as employees and others within the control of the company.

“While the investigation is substantially complete, there are still additional interviews, documents and other information that need to be reviewed before submitting the final report.

“Among the critical findings in from the investigation are that a number of former Vesttoo executives, namely Bertele, Lifshitz, Udi Ginati and Josh Rurka were directly involved in creating fake documents and forging identities.

“A number of third parties were also involved in this scheme, including bank employees of China Construction Bank and other banks and individuals associated with the company’s largest investor, a company known as Yu Po Finance Ltd.

“While the company initially stated that the source of the fraud is external, the evidence found demonstrates that the individuals stated above, knowingly directed, instigated and engaged in the fraudulent activities themselves.

“The nature and extent of the conspiracy by and among the various wrongdoers took various forms.

“The report also highlights the steps that the company has taken to ensure that appropriate institutional financial security controls are in place and to resolve contractual obligations on a commercial basis.

“It describes the development of a commercially reasonable and achievable plan for reforming and conducting its business going forward, named Trade Forward.”

“The efforts are being led by a board special committee, which comprises industry veterans Chris Gottschalk and Pasha Romanovski, and a number of the company’s key employees.”

Mr Barlev noted: “Providing the insurance markets with evidence that the company has strong financial controls is central to our ability to effectively restart our business. At that point, we can quickly move to a new business strategy that can take advantage of Vesttoo’s core strengths and respond to the demand for its services in the insurance industry.”

He also noted: “We can guarantee today that the company has embarked on a new path, after a deep identification of the factors that harmed its activity. We will act decisively in order to sue anyone who harmed the company's activities, its name and its reputation, including China Construction Bank, Yaniv Bertele, Alon Lifshitz, Udi Ginati and Josh Rurka.

“We believe that the company has significant technological, business and economic value, and through a proper process of restructuring, and conducting proper negotiations, we will be able to reach a result to the benefit of all stakeholders.

“This is the only way forward. We will work day and night in order to direct the company on a new business path. The company operates in a high-quality market, with tremendous business potential, and at the same time brings with it groundbreaking technology and a model of significant economic value to the insurance market.”

The company statement continued: “The (interim) report noted that while there is no dispute that Vesttoo’s lack of institutional controls and misdeeds of those in charge and others within their circle of influence have led to substantial value destruction and mistrust in the Vesttoo platform, Vesttoo and its advisers intend to work closely with the newly formed committee of unsecured creditors in the US bankruptcy case and other key stakeholder groups to hold accountable all wrongdoers and attempt to address the other issues in the US, Bermuda, Israel and elsewhere as quickly as possible, while at the same time rehabilitating the valuable Vesttoo platform and positioning it for future success.

“Lastly, the company can confirm that Yaniv Bertele’s attempt to install attorney Ziv Ironi to serve on Vesttoo’s board on his behalf was not accepted by the board of directors, and Bertele was subsequently removed from the board.”