The Securities and Exchange Commission charged a former insurance industry wunderkind with fraud, claiming he and an associate diverted more than $300 million from insurers they controlled and caused the companies to become insolvent, the Wall Street Journal reported. The civil charges against Alexander Chatfield Burns include allegations that he and the associate “raided those insurance companies of their funds” and replaced them with assets that were either worthless or grossly overvalued, including a supposed Caravaggio painting “of questionable authenticity.” The alleged scheme was carried out by a New York-based company, Southport Lane Management LLC, that Burns created while in his early 20s. Through Southport, Burns and associates gained control of several insurance companies starting in 2013, then allegedly began diverting the insurers’ assets. The alleged scheme collapsed in early 2014, when Burns checked into a mental-health ward at New York’s Bellevue Hospital, leaving behind an affidavit describing an unusual series of asset transfers.
