COLCHESTER, Conn., May 12, 2006 (PRIMEZONE) -- On May 12, 2006, Scott+Scott, LLC filed a class action in the U.S. District Court for the Southern District of New York against Fairfax Financial Holdings Ltd. ("Fairfax Financial" or the "Company") (NYSE:FFH) and certain officers. The action is on behalf of Fairfax Financial securities purchasers during the period March 24, 2004 through March 21, 2006, inclusive (the "Class Period"), for securities law violations. This action is also brought on behalf of all purchasers of Fairfax Financial 7.75% senior notes due April 26, 2012 (the "Sub-class"), pursuant to the August 25, 2004 offering registration statements and/or prospectus. Fairfax Financial, through its subsidiaries, operates as an underwriter of property and casualty insurance and reinsurance. The complaint alleges that defendants made false and misleading statements regarding the Company's financial performance by improperly accounting for transactions relating to finite contracts and treaties at its Odyssey Re Holdings subsidiary ("Odyssey Re") and concealing an internal review of those matters. As a result, the price of the Company's securities was inflated during the Class Period, thereby harming investors.
If you purchased Fairfax Financial securities during the Class Period or are a member of the Sub-class and wish to serve as a lead plaintiff in the action, you must move the Court no later than June 12, 2006. Any purported class member may move the Court to serve as lead plaintiff through counsel of its choice, or may choose to do nothing and remain an absent class member. If you wish to discuss this action or have questions concerning this notice or your rights, please contact Scott+Scott (scottlaw@scott-scott.com, 800/404-7770, 860/537-5537) or visit the Scott+Scott website, www.scott-scott.com, for more information. There is no cost or fee to you.
According to the complaint, defendants' Class Period financial statements were false and misleading as they omitted material facts, including that the Company: (a) employed flawed and defective accounting practices and internal controls; (b) understated its reserves; and (c) utilized aggressive off-balance sheet mechanisms. On March 21, 2006, the complaint alleges, defendants revealed details of a broadly escalated governmental investigation into the Company, following the issuance of a subpoena in response to defendant V. Prem Watsa's statements regarding the Company's internal review of improper accounting practices at the Company and at Odyssey Re. On this news, the price of Fairfax Financial stock plummeted from its closing price of $130.90 on March 21, 2006, to close on March 22, 2006 at $113.93, for a loss of $16.97 or 12.9%, on unusually heavy trading volume.
The plaintiff is represented by Scott+Scott, a firm with significant experience in prosecuting investor class actions. The firm dedicates itself to client communication and satisfaction and currently is litigating major securities, antitrust and employee retirement plan actions throughout the United States. The firm represents pension funds, charities, foundations, individuals and other entities worldwide.