NEW YORK, July 28, 2005 (PRIMEZONE) -- Goodkind Labaton Rudoff & Sucharow LLP, Lead Counsel in the securities class action against American International Group ("AIG"), has filed a class action lawsuit on July 27, 2005 in the United States District Court for the Southern District of New York, on behalf of persons who purchased or otherwise acquired publicly traded securities of RenaissanceRe Holdings Ltd. ("RenaissanceRe" or the "Company") (NYSE:RNR) between January 24, 2002 and July 25, 2005, inclusive, (the "Class Period"). The lawsuit was filed against RenaissanceRe, James Standard, Michael W. Cash, William Riker, John M. Lummis, and Martin J. Merritt ("Defendants").
If you are a member of this class, you can view a copy of the complaint and join this class action online at http://www.glrslaw.com.
If you bought RenaissanceRe securities between January 24, 2002 and July 25, 2005, inclusive, you may qualify to serve as lead plaintiff. Lead Plaintiff papers must be filed with the court no later than 60 days from today. If you would like to consider serving as Lead Plaintiff or have any questions about the lawsuit, please contact one of our representatives or Christopher Keller, Esq. at 800-321-0476.
The complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1034 and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that Defendants issued a series of false and misleading statements to the market regarding the Company's financial condition. The complaint further alleges that these statements were false and misleading because:
-- In 2001, RenaissanceRe entered into various contracts with
Inter-Ocean, which were used by Defendants to smooth and
manipulate the earnings of the Company in the years 2002
through 2004;
-- RenaissanceRe failed to properly account for the timing of
the recognition of reinsurance recoverables, which had the
impact of misstating net income by as much as 12 percent in
a given year;
-- RenaissanceRe failed to properly account for the timing of
the recognition of premium on multi-year ceded reinsurance
contracts in the first three quarters of 2004;
-- As a result, the Company's financial reports were not prepared
in accordance with Generally Accepted Accounting Principles
("GAAP").
Beginning in mid 2004, numerous companies involved in the reinsurance industry began receiving subpoenas regarding their business practices, and inquiring about their use and sale of reinsurance contracts. On February 22, 2005, RenaissanceRe announced that it planned to restate its financial statements for 2001, 2002, and 2003 to correct "accounting errors associated with reinsurance ceded by the Company." In addition, RenaissanceRe announced that it "had discovered an error in the timing of the recognition of premium on multi-year ceded reinsurance contracts for the first three quarters of 2004." On July 11, 2005, the Company issued a press release announcing that it had received and accepted the resignation of Michael W. Cash, Senior Vice President of Specialty Reinsurance for the Company, after he voluntarily refused to accept the subpoenas of the SEC calling for his testimony in its investigation of the Company's restatement. On July 25, 2005, the Company announced that Defendant Standard had received a "Wells Notice" from the SEC in regard to the agency's investigation of the Company's financial statements. In reaction to this development, shares of RenaissanceRe dropped $4.25 per share to close at $42.98, from its close of $47.23 on July 22, 2005, on extraordinarily heavy volume.
Plaintiffs are represented by the law firm of Goodkind Labaton Rudoff & Sucharow LLP. Goodkind Labaton is one of the country's premier national law firms that represent individual and institutional investors in class action, complex securities, and corporate governance litigation. The firm has been a champion of investor rights for over 40 years and has been recognized for its reputation for excellence by the courts.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.