On June 14, 2006, the Court entered the Mandate from the Court of Appeals for the Eleventh Circuit. According to the Mandate, the decision of the District Court to dismiss the First Amended Complaint was affirmed.
On October 14, 2004, a First Amended Class Action Complaint was filed. The plaintiff again amended the complaint, by filing another First Amended Class Action Complaint on October 21, 2004. The defendants responded by filing motions to dismiss the complaint. On June 3, 2005, the Court entered the Memorandum Opinion and Order dismissing the case. According to the Order, the plaintiff’s federal securities fraud claims were dismissed with prejudice, and all other claims asserted in the action were dismissed without prejudice. On July 1, 2005, the plaintiff filed a notice of appeal.
The original lawsuit claims that the defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder, including rule 10b-5 of the United States Securities and Exchange Commission.
The complaint names as defendants Cumberland Casualty & Surety Company and Dorinco Reinsurance Company,Cumberland's president, Secretary and Chief Financial Officer of Cumberland and president and chief executive officer of Dorinco.
The complaint alleges that the defendants offered and sold securities to the investing public utilizing false statements which they knew or recklessly disregarded were misleading in that they contained misrepresentations and failed to disclose material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.
Specifically, the complaint alleges that the IRMP was marketed as an account management program which would be insured against market losses after five (5) years but which was in fact not so insured.