Politics
How Wall Street hedge funds are gambling millions on Eaton fire insurance claims
In a high-stakes gamble, Wall Street hedge funds are offering to buy claims that insurers may have against Southern California Edison if the utility is found liable for causing the devastating Eaton fire in Altadena.
The solicitations are legal, but have alarmed California state officials — who loathe the idea of investors profiting from a disaster that claimed 18 lives and destroyed more than 9,400 homes and other structures.
“I think everyone in this room looks at a catastrophe, like what happened in Southern California, and our natural instincts are to say, ‘What can we do to help?’” Tom Welsh, the chief executive of the California Earthquake Authority, which manages the state’s wildfire fund, said at a recent public meeting. “There are other actors in the environment who look at that situation in Southern California and ask instead, “What can I do to profit?’”
The investors are aiming to buy so-called subrogation claims from insurance companies. These are claims that insurers would file against Edison seeking reimbursement for the money they paid to their policyholders for fire damages if it’s determined the utility’s equipment triggered the wildfire that began Jan. 7.
For the insurers, selling the claims — even at a steep discount — allows them to get at least some reimbursement for the money they’ve paid out. For the hedge funds buying the claims, it’s a gamble that could pay big if Edison is found liable and they can cash in those claims for much more than they paid.
More than $17 billion in insurance claims for the Eaton and Palisades fires has been paid out so far, according to the California Department of Insurance.
State officials say California has a stake in the trading of fire-related subrogation claims, which was previously reported by Bloomberg, because of the potential effect on the state’s wildfire fund.
That fund, which currently has about $21 billion, would be used to cover most of the costs of damage claims should Edison be found liable for starting the Eaton blaze. While the cause is still under investigation, a leading theory is that a decommissioned transmission line in Eaton Canyon was reenergized and sparked the blaze, Edison has said.
The wildfire fund is managed by a state board called the Catastrophe Response Council. At its last meeting in May, Welsh told the board that solicitations from New York brokers and investment firms began landing in his email inbox in March.
Ronald Ryder at Oppenheimer & Co., a New York investment firm, told Welsh in an email on April 15 that his company was currently trading the subrogation claims. Ryder wrote that there had already been 10 transactions worth more than $1 billion in recovery rights for the Eaton fire as well as the Palisades fire in Pacific Palisades, where the city of Los Angeles faces potential liability.
In another email, Ryder told Welsh that investors were bidding 47 cents on the dollar for the claims related to the Eaton fire. For the Palisades fire, the bidding was 5 cents on the dollar, Ryder wrote.
Welsh warned the council that “speculative investors” might hold onto the Eaton claims and “really try to get outsized profits by demanding settlements from Edison of 75, 80, 85 cents on the dollar.”
If that were to happen, the wildfire fund could pay out “hundreds of millions, if not billions of dollars” more than if the claims were settled directly by the insurers, he said.
“That would really, very negatively impact the durability of the wildfire fund,” Welsh said.
Oppenheimer declined to comment, and Ryder didn’t respond to messages.
Under a 2019 state law, the state wildfire fund would be expected to reimburse Edison for most of the insurers’ payments to policyholders if its electrical equipment is found to have started the Eaton fire. The Palisades fire, which occurred in territory serviced by the L.A. Department of Water and Power, isn’t covered by the state fund.
California lawmakers created the wildfire fund in 2019 to protect the state’s three biggest for-profit utilities — Edison, Pacific Gas & Electric and San Diego Gas & Electric — from bankruptcy if their equipment sparks catastrophic wildfires.
The possibility of large settlements paid out by the wildfire fund has led to dozens of lawsuits against Edison, even before the cause of the fire has been determined.
If found responsible for the fire, Edison would negotiate settlements with the insurers, as well as with homeowners and others who have filed lawsuits, saying they’ve been harmed. The utility would then ask the state wildfire fund to cover those amounts.
If the insurers have sold their claims, however, the investors who bought them would reap the returns. Attorneys who handle the complex transactions would also get a cut and “generally take a very high percentage off the top,” Paul Rosenstiel, a catastrophe council member, said at last month’s meeting.
Already, Gov. Gavin Newsom and other state leaders are worried that the $21-billion wildfire fund could be depleted by damage claims from the Eaton fire.
Welsh recounted how a hedge fund had profited in 2019 by buying insurers’ subrogation claims against PG&E after its transmission line was found to have started the 2018 Camp fire that killed 85 people and destroyed much of the town of Paradise. Bloomberg reported at the time that hedge fund Baupost Group made a profit of hundreds of millions of dollars by buying the claims at 35 cents on the dollar and later getting a settlement valued at much more.
To stop hedge funds from profiting on the claims, Welsh said, the earthquake authority is now considering changing its claim administration procedures to make the settlements less lucrative for those investors.
One possible change being discussed, according to authority staff, would require a utility that ignited a wildfire to prioritize settling the claims of victims and insurers who have not sold their subrogation rights before those claims owned by hedge funds.
Politics
Commentary: Trump’s World Cup meddling only made matters worse for rattled U.S. squad
SEATTLE — Is everybody happy now? You good, Mr. President?
Put our boys in a blender, President Trump did, with those phone calls to FIFA President Gianni Infantino. Messed with their mojo by politicking to get American striker Folarin Balogun’s red card rescinded.
We’ll have to check VAR, but it might be the first time Trump succeeded at having a decision overturned.
Probably because this time what he sought to overturn — discipline stemming from Balogun’s accidental contact in the United States’ victory over Bosnia and Herzegovina — actually was unjust. Balogun should not have received a red card.
The problem is, having our President butt in here was a joke. Unfunny and out of bounds, offsides, an own goal — all of the things.
It put the U.S. team at the center of a geopolitical maelstrom, which is exactly what they did not need in the hours before the biggest match of their lives and the biggest match in the history of the U.S. men’s soccer program.
Some 40 or 50 million viewers were expected to tune in; how many of them watched for the first time? And what sort of impression did Monday’s 4-1 blunder-filled meltdown against Belgium make? That we stink at soccer — still?
If you were one of them, please, believe your soccer-fan friends when they tell you the Americans played much better in previous matches.
But so much for a magical run. On their home turf, the Americans pulled up lame before the finish line (aka, for the U.S. team’s purposes, its first quarterfinals since 2002).
To their credit, after the debacle, members of the U.S. team didn’t complain about anything being rigged. They didn’t use the distraction as an excuse. And they didn’t point fingers at anyone — anyone at all.
U.S. striker Folarin Balogun (20) walks to the locker room at halftime against Belgium in the World Cup on Monday at Lumen Field in Seattle.
(Allen J. Schaben / Los Angeles Times)
“We’re playing on home soil,” defender Chris Richards said. “So the only pressure we put on ourselves is to perform for our country, and ultimately didn’t feel the way we wanted to today. But I don’t think the antics of the last 24 hours had anything to do with it.”
No, they said the “debate,” or “outside noise” or “political manipulation” — as Tim Ream, Alex Freeman and coach Mauricio Pochettino described what others are calling “Balogate” — were not to blame for the gut-punch that answered the question: Why not us?
Because the U.S. is not yet good enough to beat the world’s great teams. Especially not when their pregame preparation includes having to try to block out an international uproar.
To have any hope against the Belgians in the round of 16 — a matchup between FIFA’s Nos. 9- and 17-ranked sides — the Americans needed to be going full-tilt, to be focused and ferocious and probably also a little bit lucky.
Instead, they looked shook, rattled. And they got rolled.
They were the worst version of themselves at the worst time, which was so weird from a team that had been on its front foot from the first whistle against Paraguay.
Not Monday. Against Belgium, they were on their heels from the outset. Heavy touches, slow afoot, playing like they had the weight of the World Cup on their shoulders.
And all that White House maddening meddling — for what?
Balogun started and played most of the match, but it could just as well have been reserve striker Ricardo Pepi. Or you or me, Balogun was that ineffective.
His play of the day came postmatch, when he approached Belgian coach Rudi Garcia and the two had a respectful exchange. A real diplomat, that Brooklyn-born, Britain-raised American by birthright.
This loss was a real team effort, of course. Christian Pulisic came off in the 59th minute after twisting his right ankle — leaving this World Cup without a goal in the four matches he appeared.
Matt Freese, the Harvard-educated starting goalkeeper, had a brain cramp of epic proportions when he stepped outside of the box and failed to corral a ball. Belgium’s Charles De Ketelaere kicked it loose and set up Hans Vanaken, whose shot traveled behind Ream for an easy score that made it 3-1 in the 57th minute.
There was a lot of poor decision-making with this match, on and off the pitch.
In the end, Trump’s appeal to Infantino did more harm than good. But what if some good could come from it?
Hey, FIFA, what about giving teams a process to appeal cards, like our American athletes in the NBA, NFL and MLB have?
Offering a suggestion box wouldn’t be opening Pandora’s box, not if it were a transparent and regular part of the game that would, hopefully, offer increasingly fair outcomes in a tournament where every match is so monumental — as our President recognized, much too enthusiastically.
U.S. coach Mauricio Pochettino waves to the crown after a 4-1 loss to Belgium at the World Cup on Monday.
(Allen J. Schaben / Los Angeles Times)
Politics
Preliminary Hearing for Man Accused of Killing Charlie Kirk Starts in Utah
Prosecutors on Monday began laying out their case against the man accused of murdering Charlie Kirk. It was the first day of a weeklong preliminary hearing that will determine whether or not there is enough evidence against the accused killer to stand trial.
Politics
Top Platner ally turns on him after bombshell rape allegation rocks campaign: ‘Red line’
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Support for embattled Maine Senate candidate Graham Platner is cratering among Democrats, with one of his most prominent supporters calling on him to exit the race following a harrowing rape allegation.
Rep. Ro Khanna, D-Calif., rescinded his endorsement and called on Platner to suspend his campaign following a bombshell Politico report detailing a rape allegation by Maine resident Jenny Racicot, 41, who previously dated the scandal-plagued candidate.
Platner immediately denied Racicot’s account — which alleges that he barged into her home in 2021 and forced her to have unprotected sex — but has said his campaign is determining its next steps.
She also went on CNN Monday evening shortly after the report was published to tell host Jake Tapper that “by dictionary definition” Platner “raped” her.
Rep. Ro Khanna, D-Calif., speaks at a town hall event on Feb. 20, 2026 in Stanford, California. The town hall focused on taxing billionaires and the future of AI. (Benjamin Fanjoy/Getty Images)
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“I thought, here’s a man who was drunk and who, by dictionary definition, raped me. And he’s blaming drunk women,” Racicot said. “So I just felt like that was a very odd take to have on that. And I also feel like with all of the comments that he made about women, sexual assault, rape, even, um, you know, the comments that he had made that was in The New York Times article about, you know, threatening people with rape, like, why does this person have this issue, like scattered throughout their life, throughout their commentary, like it‘s on their mind?”
“I’ve been very clear that sexual assault or violence against women is a red line,” Khanna said in a post on social media Monday evening. “These allegations are very serious and credible. Graham Platner should drop out from the race. I am withdrawing my endorsement.”
Khanna’s statement preceded Senate Minority Leader Chuck Schumer, D-N.Y., and Sen. Kirsten Gillibrand, D-N.Y., the head of Senate Democrats’ campaign arm, issuing a joint statement calling on Platner to “immediately” leave the race, so the party can choose a new nominee.
The pair said the Democratic Senatorial Campaign Committee (DSCC) would not invest in Maine — a top pick-up opportunity for Democrats in November’s midterm elections — if he continued to seek the battleground seat held by Sen. Susan Collins, R-Maine.
Both Schumer and Gillibrand supported Gov. Janet Mills, D-Maine, in the contentious primary and did not endorse Platner until he won the party’s nomination.
Meanwhile, Khanna, a far-left populist with likely presidential ambitions, had embraced Platner’s insurgent Senate campaign for months amid a patchwork of controversies.
Khanna personally campaigned with the Maine Senate hopeful in June shortly before Platner became the party’s nominee. The campaign stop came just one day after Lyndsey Fifield, a former Platner girlfriend, accused Platner of abuse — an allegation first reported by The New York Times that Platner has fiercely denied.
By that point, Platner was also facing scrutiny for sending sexually explicit messages to at least half a dozen women while married, making a plethora of offensive online statements over the period of a decade and getting a Nazi-linked tattoo that he wore for most of his adult life.
Shannon Watts, a Democratic strategist and founder of the gun control group Mom Demands Action, slammed the timing of Khanna’s statement.
“You flew to Maine to campaign with him AFTER he was accused of assault against another woman,” Watts wrote on social media.
Khanna previously appeared to dismiss the severity of Fifield’s account alongside many Democratic lawmakers, who seized on her background in Republican politics. He also argued that Platner, a combat veteran who has struggled with PTSD, had overcome a dark past and was deserving of redemption.
“Here you have a case of someone who had a dark chapter in his life, was in toxic relationships, was ashamed about it, who served this country, and the Maine voters are saying, ‘Look, let’s give him some grace, and his focus is stopping these wars, and it’s getting national health insurance, and it’s taking on economic inequality,” Khanna told CBS News in an interview.
Democratic U.S. Senate candidate Graham Platner speaks at his primary election event in Blue Hill, Maine, on June 9, 2026. (CJ Gunther/Getty Images)
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And Khanna told Fox News’ Martha MacCallum in June that he asked Platner if there were any credible allegations of sexual assault that had yet to be revealed. He said Platner denied it.
“I made it clear that, for me, is a red line,” the California lawmaker said. “And he said, no, there is not.”
“Now, obviously, he had texts that were allegedly consensual, and while he was married, And that’s a matter for him and his wife. And his wife came out and said that she forgave him. And so that is a different matter for me than abuse or assault or what people did in the Epstein class. It’s a very different matter.”
Khanna was not the only prominent Platner supporter to disavow the Senate hopeful following Monday’s rape allegation.
Sen. Martin Heinrich, D-N.M., an early Platner supporter, was the first prominent Democrat to rescind his endorsement after Politico’s report broke.
Meanwhile, Sen. Ruben Gallego, D-Ariz., rescinded his endorsement Monday evening, but stopped short of calling on Platner to exit the race.
Gallego, a former ally of disgraced ex-Rep. Eric Swalwell, D-Calif., has faced scrutiny over his past treatment of women. The Senate Ethics Committee recently dismissed a complaint brought by Rep. Anna Paulina Luna, R-Fla., in a bipartisan manner.
His Arizona colleague, Sen. Mark Kelly, D-Ariz., who did not endorse Platner, also called on the Senate hopeful to suspend his campaign.
“Character and accountability matter regardless of party,” Kelly wrote on social media. “It’s time for Graham Platner to drop out and allow for someone else to be nominated and give Democrats the best chance to win this seat in November.”
Far-left Twitch streamer Hasan Piker, who has championed socialist candidates across the country, also distanced himself from Platner on Monday.
Sen. Ruben Gallego, D-Ariz., talks to reporters as he heads for a vote at the U.S. Capitol on Jun. 1, 2026 in Washington, D.C. (Chip Somodevilla/Getty Images)
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“This is beyond red flags. This is irredeemable,” Piker said during his livestream.
Fox News Digital reached out to Platner’s campaign for comment.
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