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Insurers claim Ponzi-duped hedge fund mislead when obtaining coverage

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A group of insurance companies, headed by Ironshore Indemnity Inc., are seeking to void approximately $70 million of coverage granted to a hedge fund forced into bankruptcy by Scott Rothstein’s devastating Ponzi scheme. In a motion for summary judgment filed in Florida federal court, the insurers allege that Banyon Income Fund LP made deceitful claims about its business operations in order to obtain insurance policies when the $1.2 billion scheme started to unravel in 2009.