New York, NY: (Oct-05-07) A class action shareholders lawsuit was filed against RenaissanceRe Holdings, alleging that RenRe engaged in sham reinsurance transactions and artificially boosted its earnings to the detriment of shareholders. The suit, filed in July 2005, claimed the reinsurer also misrepresented its true financial position in press releases and reports. The class included stockholders who purchased common stock between April 22, 2003 and July 25, 2005.
As part of a settlement reached, the company agreed to a $13.5 million payout to resolve the class action. Judge William H. Pauley of the United States District Court for the Southern District of New York granted the parties a preliminary approval. Pauley also certified the suit as a class action for the purposes of the settlement. In February 2007, RenRe agreed to pay $15 million to settle similar allegations that the company created sham reinsurance deals to smooth $26 million of its earnings from 2001 to 2002 and 2003. [TRADING MARKETS: RENRE SECURITIES]