Fairfax speaks out about subpoena’s

In advance of its Annual Report Fairfax Financial Holdings Ltd. (TSX:FFH.SV) says it is releasing a disclosure excerpt in order to coincide with the 10-K filing by Crum & Forster Holdings Corp.
The early release of the disclosure is a direct result of the previously disclosed delay in the filing of its Annual Report.
The disclosure states:
On September 7, 2005, Fairfax announced that it had received a subpoena from the U.S. Securities and Exchange Commission (SEC) requesting documents regarding any nontraditional insurance or reinsurance product transactions entered into by the entities in the consolidated group and any non-traditional insurance or reinsurance products offered by the entities in that group.
On Sept. 26, 2005, the company announced that it had received a further subpoena from the SEC as part of its investigation into such loss mitigation products, requesting documents regarding any transactions in the company’s securities, the compensation for such transactions and the trading volume or share price of such securities.
Previously, on June 24, 2005, the company announced that its Fairmont subsidiary had received a subpoena from the SEC requesting documents regarding any nontraditional insurance product transactions entered into by Fairmont with General Re Corporation or affiliates thereof.
The U.S. Attorney’s office for the Southern District of New York is reviewing documents produced by the company to the SEC and is participating in the investigation of these matters. The company is cooperating fully with these requests. The company has prepared presentations and provided documents to the SEC and the U.S. Attorney’s office, and its employees, including senior officers, have attended or have been requested to attend interviews conducted by the SEC and the U.S. Attorney’s office.
The company and CEO Prem Watsa received subpoenas from the SEC in connection with the answer to a question on the Feb. 10, 2006 investor conference call concerning the review of the company’s finite insurance contracts.
In the fall of 2005, Fairfax and its subsidiaries prepared and provided to the SEC a list intended to identify certain finite contracts and contracts with other non-traditional features of all Fairfax group companies.
As part of the 2005 year-end reporting and closing process, Fairfax and its subsidiaries internally reviewed all of the contracts on the list provided to the SEC and some additional contracts as deemed appropriate. That review led to the restatement by OdysseyRe. That review also led to some changes in accounting for certain contracts at nSpire Re which were immaterial at the consolidated Fairfax level.
These inquiries are ongoing and the company continues to comply with requests for information from the SEC and the U.S. Attorney’s office.
Fairfax says it cannot predict the outcome from these continuing inquiries, or the ultimate effect on its business, which effect could be material and adverse.
Fairfax Financial Holdings Limited is a financial services holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance, investment management and insurance claims management.