Hedge funds condemned by California for their role in wildfire claims

Hedge funds in California are facing backlash for their bets related to insurance claims from the Los Angeles wildfires, which have been criticized as unethical. The focus of the trades involves so-called subrogation claims — over the past few months, hedge funds, private equity firms, and other alternative investment institutions have been purchasing these claims from insurance companies. Subrogation rights are triggered when a third party is suspected of being responsible for the losses covered by the insurance company. The California Earthquake Authority is currently criticizing hedge funds that purchase these claims, calling such transactions "opportunistic, profit-driven investment speculation," and stating plans to combat "hedge funds and other speculators actively seeking to profit from California's devastating wildfire disasters."