Fairfax Financial Holdings Limited

Class Period: May 21, 2003 to Mar 22, 2006

Lead Plaintiff Deadline: Sep 23, 2011 + Deadline passed

Summary of Case:

A securities class action has been filed against Fairfax Financial Holdings Limited ("Fairfax" or the "Company") on behalf of all persons or entities who purchased and/or acquired Fairfax securities listed or registered on an American stock exchange between May 21, 2003 to March 22, 2006.  This case has been filed in the USDC - New York (Southern).

The Complaint alleges that during the Class Period, Defendants issued materially false and misleading statements regarding the Company's business practices and financial results. Specifically, Fairfax defrauded investors by inflating the value of its assets and concealing its lack of liquidity over the course of several years by fraudulently accounting for reinsurance contracts which were, in essence, loans by, among other things: (i) failing to employ adequate risk transfer tests to determine if reinsurance contracts qualified for "reinsurance" rather than "deposit" accounting; (ii) maintaining ineffective controls while assuring investors that the Company's controls were effective; (iii) using privately held foreign assets domiciled in jurisdictions with lax oversight to permit the Company to manipulate its investment income; (iv) failing to properly account for losses in companies that should have been consolidated with Fairfax; (v) improperly accounting for intercompany transactions; and (vi) using "investments" to funnel money to cash strapped subsidiaries.

On March 22, 2006, Fairfax revealed that the Securities and Exchange Commission ("SEC") had subpoenaed records of all of Fairfax's finite reinsurance contracts in the previous year and that the SEC had subpoenaed V. Prem Watsa, Fairfax's Chairman and Chief Executive Officer, in connection with his denials of Fairfax's use of finite reinsurance contracts. Fairfax's March 2006 announcement also disclosed that the Company's auditor, PricewaterhouseCoopers LLP Chartered Accountants, Toronto, Ontario Canada, received a subpoena from the SEC. In response to these disclosures, the price of Fairfax stock fell $19.97 per share, or 13%, to close at $113.93 per share, representing a decline in market capitalization of approximately $300 million. Then, on July 29, 2006, Fairfax revealed that the Company would have to restate its financials going back to 2001.

If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.