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.
NEWYou can now listen to Fox News articles!
The U.S. military announced another deadly strike against a vessel that it alleges was involved in “narco-trafficking” efforts.
“On April 19, at the direction of #SOUTHCOM commander Gen. Francis L. Donovan, Joint Task Force Southern Spear conducted a lethal kinetic strike on a vessel operated by Designated Terrorist Organizations,” U.S. Southern Command indicated in a post on X.
“Intelligence confirmed the vessel was transiting along known narco-trafficking routes in the Caribbean and was engaged in narco-trafficking operations,” the post continued.
US MILITARY KILLS 2 SUSPECTED CARTEL OPERATIVES IN LATEST EASTERN PACIFIC LETHAL STRIKE, SOUTHCOM SAYS
The U.S. military announced that it killed three “narco-terrorists” in a strike in the Caribbean on Sunday, April 19, 2026. (@Soutcom via X)
SOUTHCOM indicated that the attack killed three men.
“Three male narco-terrorists were killed during this action. No U.S. military forces were harmed,” the post noted.
President Donald Trump’s administration has carried out dozens of deadly strikes against vessels of alleged “narco-terrorists.”
US MILITARY CONDUCTS MORE DEADLY STRIKES AGAINST VESSELS OF ALLEGED ‘NARCO-TERRORISTS’
Marine Corps Lt. Gen. Francis L. Donovan, nominee for commander of U.S. Southern Command, testifies during his Senate confirmatino hearing on Capitol Hill in Washington, D.C., on Jan. 15, 2026. (Brendan Smialowski/AFP via Getty Images)
In a completely different part of the world, amid ongoing tensions between America and Iran, the U.S. attacked an Iranian-flagged cargo ship on April 19.
“Guided-missile destroyer USS Spruance (DDG 111) intercepted M/V Touska as it transited the north Arabian Sea at 17 knots enroute to Bandar Abbas, Iran. American forces issued multiple warnings and informed the Iranian-flagged vessel it was in violation of the U.S. blockade,” U.S. Central Command noted.
US SEIZES IRANIAN SHIP AFTER OPENING FIRE; PAKISTAN TALKS IN DOUBT
President Donald Trump on the South Lawn of the White House before boarding Marine One in Washington, D.C., on Thursday, April 16, 2026. (Graeme Sloan/Sipa/Bloomberg via Getty Images)
CLICK HERE TO DOWNLOAD THE FOX NEWS APP
“After Touska’s crew failed to comply with repeated warnings over a six-hour period, Spruance directed the vessel to evacuate its engine room. Spruance disabled Touska’s propulsion by firing several rounds from the destroyer’s 5-inch MK 45 Gun into Touska’s engine room. U.S. Marines from the 31st Marine Expeditionary Unit later boarded the non-compliant vessel, which remains in U.S. custody,” CENTCOM noted.
SACRAMENTO — A month after a public uproar over a mama bear being euthanized after swiping at a resident in Monrovia, state lawmakers are considering mandating the use of nonlethal ways to help allow wildlife and humans to coexist.
Sen. Catherine Blakespear (D-Encinitas) said she believes the bear’s death, and the state’s decision to kill four wolves last year that were preying on cattle, raised public concern.
“That made everybody realize we have to do better here,” she told The Times on Thursday. “We need to recognize the importance of seeing ourselves, humans, as part of a larger ecosystem that includes animals and plants and our world and trying to protect it.”
Senate Bill 1135, introduced by Blakespear, would direct the California Department of Fish and Wildlife to create the Wildlife Coexistence Program, which would provide public education, offer technical assistance and maintain a statewide incident reporting system. It would help communities deploy nonlethal devices to deter predators, like barriers or noise and light machines.
At a legislative hearing on Tuesday, Blakespear told the Senate Committee on Natural Resources and Water that a three-year state initiative offering similar services was seeing positive results — until it was discontinued two years ago after funding ran dry. She said it was time to implement a permanent program.
“Human population growth, habitat loss and the growth of industry across California inevitably leads to interaction between humans and wildlife,” Blakespear told legislators. “No two animal species are the same and each has unique behavior patterns and territories. SB 1135 recognizes these differences and gives communities the tools to prevent conflict and respond when it occurs.”
The bill would also rename a state program that reimburses ranchers who lose livestock to wolves, calling it the Wolf-Livestock Coexistence and Compensation Program. It would require ranchers seeking compensation to show they were using nonlethal deterrents approved by the department.
Sen. Shannon Grove (R-Bakersfield) stressed that life in rural areas is different than living in a city. She said some families and cattle ranchers have a genuine fear of predators.
“When these baby calves drop on the ground and then two wolves start ripping them apart, it’s not the prettiest thing you’ve ever witnessed,” said Grove, who abstained from voting on the measure. “These wolves are not puppies.”
More than 30 organizations are supporting the legislation, including the National Wildlife Federation, Defenders of Wildlife, California State Assn. of Counties, Animal Legal Defense Fund and Citizens for Los Angeles Wildlife.
The California Farm Bureau and the California Cattlemen’s Assn. are in opposition due to concerns over funding.
Last month, Blakespear sent a letter to the chair of the Senate Committee on Budget and Fiscal Review requesting $48.8 million to implement the legislation, with $25 million earmarked for addressing wolf encounters. Half of the money for wolf conflicts would go toward deterrents; the remainder would compensate ranchers for their losses.
Kirk Wilbur, vice president of government affairs cattlemen’s association, said the organization is concerned about that division of funding — especially if funding is reduced.
Wilbur told legislators Tuesday that the organization supports some aspects of the bill and was having productive conversations with Blakespear to address their concerns.
The bill ultimately passed the committee with a 5-to-1 vote and now heads to the Senate Committee on Appropriations.
Human wildlife conflicts have made headlines in California recently, with a bear refusing to leave a basement for weeks in Altadena and a mama bear dubbed Blondie crossing paths last month with a woman walking her dog in Monrovia.
Blondie swiped the woman’s leg, and was subsequently euthanized by the California Department of Fish and Wildlife. Her two cubs were sent to the San Diego Humane Society’s Ramona Wildlife Center. The bear’s death upset many in the community, as thousands had signed a petition calling for other solutions, like relocation.
Deadly wildlife attacks on humans, however, are rare in California.
There have been six reported human fatalities from mountain lions since 1890, according to the state Fish and Wildlife Department. The agency recorded one human fatality from a coyote in 1981 and another fatality from a black bear in 2023. The department has no recorded human fatalities from gray wolves.
NEWYou can now listen to Fox News articles!
The Justice Department is turning to former Trump attorney Joeseph diGenova to spearhead a probe into ex-CIA Director John Brennan and others over the origins of the Trump-Russia investigation, as the department reshuffles leadership of the sprawling inquiry.
Acting Attorney General Todd Blanche has tapped diGenova to serve as counsel overseeing the matter, according to a New York Times report, putting a former Trump attorney in a key role in the high-profile probe. A federal grand jury seated in Miami has been impaneled since late last year.
The Department of Justice did not immediately respond to Fox News Digital’s request for comment.
DOJ ACTIVELY PREPARING TO ISSUE GRAND JURY SUBPOENAS RELATING TO JOHN BRENNAN INVESTIGATION: SOURCES
Joseph diGenova represented President Donald Trump during special counsel Robert Mueller’s investigation. (Tom Williams/CQ-Roll Call/Getty Images)
DiGenova, a former U.S. attorney in Washington, D.C., who represented Trump during special counsel Robert Mueller’s investigation, has repeatedly accused Brennan of misconduct tied to the origins of the Russia probe—allegations that have not resulted in criminal charges.
He also said in a 2018 appearance on Fox News that Brennan colluded with the FBI and DOJ to frame Trump.
The origins of the Russia investigation have been the subject of ongoing scrutiny by Trump allies, who have argued that intelligence and law enforcement officials improperly launched the probe.
BRENNAN INDICTMENT COULD COME WITHIN ‘WEEKS’ AS PROSECUTORS REQUEST OFFICIAL TRANSCRIPTS
Joseph diGenova has previously said that ex-CIA chief John Brennan colluded with the FBI and DOJ to frame Trump. (Tom Williams/CQ-Roll Call/Getty Images)
DiGenova’s appointment follows the ouster of Maria Medetis Long, a national security prosecutor in the South Florida U.S. attorney’s office. She had been overseeing the inquiry, including a false statements probe related to Brennan and broader conspiracy-related investigations.
As the investigation continues, federal investigators have issued subpoenas seeking information related to intelligence assessments of Russian interference in the 2016 election.
CLICK HERE TO DOWNLOAD THE FOX NEWS APP
John Brennan has denied any wrongdoing related to the Russia investigation. (William B. Plowman/NBC/NBC NewsWire via Getty Images; Alex Wong/Getty Images)
Brennan has previously denied wrongdoing related to the Russia investigation and has defended the intelligence community’s assessment that Moscow interfered in the 2016 election.
-
News7 minutes agoThe Onion has agreed to a new deal to take over Infowars
-
New York2 hours agoGotti Grandson Is Sentenced to 15 Months for Covid Relief Fraud
-
Detroit, MI2 hours agoWhy a Detroit family’s $300 brick repair job turned into a fraud investigation
-
San Francisco, CA2 hours agoSea lion pup found in San Francisco’s Outer Sunset malnourished but ‘feisty’
-
Dallas, TX2 hours agoDallas Cowboys 2026 NFL Draft debate heats up
-
Miami, FL3 hours agoMan arrested in Miami for alleged sexual battery on 10-year-old girl – WSVN 7News | Miami News, Weather, Sports | Fort Lauderdale
-
Boston, MA3 hours agoFormer BYU star Clayton Young crushes lifetime best in Boston — on short notice
-
Denver, CO3 hours agoColorado boasts two of the best coffee shops in the Americas, according to new ranking