Vesttoo CEO pushed out of company after fake collateral scandal
Vesttoo CEO pushed out of company after fake collateral scandal
The Vesttoo board of directors removed co-founders Yaniv Bertele and Alon Lifshitz and plans to dismantle the company and retrieve the cash in its coffers, which, according to estimates, still amounts to tens of millions of dollars
The CEO of Vesttoo is paying the price for the alleged multi-billion dollar fraud committed on the company’s platform. Yaniv Bertele, the CEO of Vesttoo, has been placed on forced leave, which effectively constitutes a layoff as of Wednesday. Vesttoo's board of directors informed Bertele that neither he nor co-founder, Alon Lifshitz, would be able to return to the company until further notice. Their connection to the company's computers was also disconnected in order to isolate them. The executives were removed from the company after one of the conclusions of the committee that examined the alleged fraud was that the current management did not regularly report to the board of directors and even hid what had unfolded in the weeks leading up to the scandal's exposure.
Against the backdrop of the layoffs of the founders and employees, the Vesttoo board of directors will attempt in the coming months to dismantle the company and retrieve the cash in its coffers, which, according to estimates, still amounts to tens of millions of dollars from the latest funding round carried out at the end of last year.
Bertele, who was the main figurehead of Vesttoo, co-founded the insurtech company in 2018, along with Lifshitz and Ben Zickel. Vesttoo's board of directors fired Bertele from the company just one day after he sent an email to the company's employees informing them that 75% of the staff are being dismissed.
A statement sent to Calcalist on behalf of Yaniv Bertele stated: "Unfortunately, parties with their own interests have chosen to take advantage of the temporary crisis that the company has fallen into in order to promote an improper takeover, even at the cost of causing fatal damage to the company and prioritizing their personal interests over the interests of the company and its investors. This move was accompanied by false and consistent leaks in the media that caused the company heavy and real damage. This is particularly true when considering that an external investigation did not establish any suspicion against any of the members of the company's management, and for good reason." Bertele added that he intends to consider his steps in view of this serious and improper conduct and "will not hesitate to take legal proceedings while keeping the good of the company in mind."
Vesttoo announced on Tuesday that it is laying off around 150 employees, accounting for 75% of the company’s workforce.
Calcalist uncovered last month that the allegedly fake letters of credit (LOCs) provided by investors to insurers for reinsurance transactions on the Vesttoo platform are believed to total a sum of around $4 billion. The fraud came to light when one of the LOCs was found to be fake, leading to a comprehensive review of all letters of credit issued by the company.
The Israeli startup released a statement last week admitting that “at a minimum, it appears that Vesttoo’s procedures were circumvented.”
