SEC plans no enforcement action against Fairfax related to finite reinsurance

The U.S. Securities and Exchange Commission (SEC) does not intend to take any enforcement action after investigating Fairfax Financial Holdings Limited (TSX and NYSE: FFH) in connection with finite reinsurance contracts.
Fairfax and its chairman and CEO, Prem Watsa, received subpoenas from the SEC in March 2006. The subpoenas were in connection with a Feb. 10, 2006 investor conference call that touched on a review of the company’s finite reinsurance contracts.
Fairfax is a majority shareholder of New York-based OdysseyRe Holdings Corp., a worldwide underwriter of property and casualty facultative reinsurance.
OdysseyRe announced in February 2006 that they would be restating financial results for 2001 to 2004, as well as for the first nine months of 2005, to correct errors related to finite reinsurance contracts.
Upon hearing of SEC’s decision not to undertake any enforcement action, Watsa commented: “We were gratified to learn that the SEC staff does not intend to recommend any enforcement action against Fairfax. 
“Throughout this investigation, we provided full cooperation to the SEC, and we are pleased that the investigation has been concluded in this manner.”