Law360 is reporting that the bankruptcy trustee overseeing the Chapter 11 filing of F-Squared Investments is alleging that two insurers are improperly denying payouts to cover the advisory firm’s legal expenses in connection with SEC litigation and a $35 million settlement in 2015. The insurers contend that an SEC subpoena served to the advisory firm before the insurance policies went into effect marked the start of a formal investigation and that the firm did not disclose, as required by the policies, that the SEC requested documents a month before the firm took out the insurance policies. However, the bankruptcy trustee counters that an SEC subpoena does not meet the definition of a claim under the insurance policies, because a subpoena is not a civil proceeding. The bankruptcy trustee further argues that the firm did not receive a formal investigation notice from the SEC until nearly three weeks after the policy period began, and that the initial subpoena was a way for the SEC to determine whether or not to start a civil proceeding, not the start of a civil proceeding itself. The ongoing case is being litigated in the U.S. District Court in Massachusetts.