Imagine starting an insurance company,collect the premiums and never have to pay a client for losses.Goldman Sachs and a few others,thought this was a splendid idea. What kind of insurance plan is this? Enter the name Capco- Customer Asset Protection Company.
Billions in Lehman Claims Could Bury an Elusive Insurer
Published: Friday, 31 Jul 2009 12:51 PM ET
The New York Times
By: Zachery Kouwe
Next to a Chinese restaurant in Burlington, Vt., lurks a quiet guardian of Wall Street — an obscure insurance company that is supposed to protect big-money investors in the event of a catastrophic failure of a major brokerage firm.
A failure, for instance, like the one that brought down Lehman Brothers nearly 11 months ago. Now, after years in the shadows, the insurer, the Customer Asset Protection Company, could finally be put to the test, and questions are starting to swirl.
The worry is that the company, which has never paid out a claim, might be unable to cope with the Lehman bankruptcy.
Capco, which is private, is something of a financial mystery. Its members include Wall Street giants like Morgan Stanley and Goldman Sachs.
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*As defined in Wikipedia