SEC Probes Converium For Insider Trading

By Michael Ha

NU Online News Service, Oct. 11, 4:12 p.m. EDT?Beleaguered Swiss reinsurer Converium Holding AG has confirmed that the company is being probed by the U.S. Securities and Exchange Commission for possible insider trading of its stock ahead of its quarterly profit warning in July.[@@]

"Converium North America has received a request for voluntary production of documents and information from the enforcement staff of the SEC," confirmed Michael Schiendorfer, spokesman for the Zug, Switzerland-headquartered reinsurer.

Mr. Schiendorfer told National Underwriter that U.S. regulators are now conducting an investigation to find out "whether there have been violations of the U.S. federal securities laws in connection with transactions in our securities by certain persons?including certain of our insiders?prior to our announcement on July 20, 2004, that our second-quarter earnings would fall short of expectations due to higher-than-modeled U.S. casualty loss emergence primarily related to the underwriting years 1997 to 2001."

Mr. Schiendorfer added that his company has voluntarily responded to the SEC's request, and that the reinsurer intends to continue to cooperate with the Commission.

Converium?a spin-off of Zurich Financial Services which has been separately listed on the New York Stock Exchange since Dec. 2001?saw its share price plunge nearly 50 percent on July 20 when it warned that the company would add up to $400 million in reserves for U.S. claims.

Converium ended up posting on July 27 a second-quarter loss of $660 million because of the reserve boost and expenses to write down the value of its U.S. business. The company has since put its North American operation in runoff and is also planning to cut about one-third of its jobs in Europe.

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SEC Probes Converium For Insider Trading

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