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Member, Beacon International Group, Ltd.
TORONTO—The New York regional office of the U.S. Securities and Exchange Commission will not seek any enforcement action against Fairfax Financial Holdings Ltd. relating to its four-year-old finite risk investigation into the Toronto-based insurer and reinsurer.
In a statement released Thursday, Fairfax said it was informed by the SEC regional office that its investigation was complete and that it does not intend to recommend any enforcement action by the SEC.
In 2005, Fairfax was served with three subpoenas by the SEC seeking a variety of information, including documents associated with certain nontraditional deals between its Fairmont Specialty Group division and Stamford, Conn.-based General Re Corp.
An internal review of its finite risk contracts ultimately led Fairfax to restate the financial results for its Stamford, Conn.-based Odyssey Re Holdings Corp. subsidiary for 2001, 2002, 2003, 2004 and the first nine months of 2005.
Fairfax and its chairman and chief executive officer, Prem Watsa, received additional subpoenas from the SEC in 2006 after Mr. Watsa told investors on a conference call that Odyssey Re's accounting treatment for certain ceded finite reinsurance contracts was the only issue that came up during the company's internal review.
In the statement, Mr. Watsa said the company was “gratified” that no enforcement action will be taken against the company and that it was “pleased” that the investigation has been concluded.