SEC issues legal notices

Fairfax Financial Holdings Limited (TSX:FFH.SV) recently received multiple subpoenas from the U.S. Securities and Exchange Commission (SEC), requesting documents regarding nontraditional insurance/reinsurance transactions made or products offered by entities of the Fairfax group.

Fairfax is a majority stockholder of Odyssey Re Holdings Corp., so the reinsurance company had been advised of the subpoena request by Fairfax and “is reviewing its obligations under the subpoena and intends to cooperate fully with the SEC in connection with this request.”

The SEC also recently served a “Wells Notice” – indicating the SEC recommends that the commission should bring a civil enforcement action against a company for alleged violations of federal securities laws – to the Bermuda-based reinsurer RenaissanceRe Holdings Ltd. (NYSE: RNR). The Notice was served in connection with the commission’s ongoing investigation into the restatement of the Company’s financial statements.

RenaissanceRe says it is “engaged in discussions with the staff of the SEC concerning the possible resolution of these matters.”

The company says it is continuing to cooperate with the SEC and other governmental agencies in their ongoing investigations. “The company is unable to predict the outcome of the investigations or whether its current efforts to resolve them will be successful,” RenaissanceRe said in a statement.

In the meantime, Canadian-based Fairfax Financial Holdings Ltd. received its second subpoena within the past month to supply documents to the SEC.

In early September, Fairfax received a subpoena from U.S. regulators to provide documents on nontraditional insurance products.

Fairfax announced recently it has received “a further subpoena from the [SEC] as part of its investigation into certain loss mitigation products, requesting documents regarding any transactions in securities of Fairfax Financial, the compensation for such transactions and the trading volume or share price of such securities. Fairfax is co-operating with that request.”