Former United States Securities and Exchange Commission attorney Willie Briscoe, founder of The Briscoe Law Firm, PLLC, and the securities litigation firm of Powers Taylor, LLP announce that a federal class action lawsuit has been filed against Fairfax Financial Holdings Limited (“Fairfax Financial” or “FFH”) (NYSE: FFH). The firms are investigating additional potential legal claims against the officers and Board of Directors of Fairfax Financial during the period of May 21, 2003 through March 22, 2006 (the “Class Period”).
If you are an affected investor, and you want to learn more about the lawsuit or join the action, contact Patrick Powers at Powers Taylor, LLP, toll free (877) 728-9607, via e-mail at email@example.com, or Willie Briscoe at The Briscoe Law Firm, PLLC toll free (877) 397-5991, or via email at WBriscoe@TheBriscoeLawFirm.com. There is no cost or fee to you.
It has been alleged that during the Class Period, Fairfax Financial and certain of its officers and directors made materially false and misleading statements or failed to disclose material information related to the company’s business and operations in violation of the Securities Exchange Act of 1934. Specifically, the lawsuit alleges that Fairfax Financial/FFH defrauded investors by inflating the value of its assets and concealing its lack of liquidity. This was allegedly accomplished by accounting for loans as a type of reinsurance contract. Among other things, it is alleged that the defendants have: (i) failed to employ adequate risk transfer tests to determine if reinsurance contracts qualified for “reinsurance” rather than “deposit” accounting; (ii) maintained ineffective controls while assuring investors that the company’s controls were effective; (iii) used privately held foreign assets domiciled in jurisdictions with lax oversight to permit the company to manipulate its investment income; (iv) failed to properly account for losses in companies that should have been consolidated with Fairfax Financial; (v) improperly accounted for intercompany transactions; and (vi) used “investments” to funnel money to cash strapped subsidiaries.