On December 29, 2006, the entered the Order signed by U.S. District Judge Richard J. Holwell. According to the Order, by a letter dated December 18, 2006, lead plaintiffs advised the Court that they did not intend to file an amended complaint. Because plaintiffs have elected not to file an amended complaint, the Clerk of the Court may close the case.
As reported by the Company’s FORM 10-Q for the quarterly period ended September 30, 2006, on April 13, 2005, two lawsuits were consolidated and are now known as In re AXIS Capital Holdings Ltd. Securities Litigation. On May 13, 2005, the plaintiffs filed an amended, consolidated complaint and added as defendants the managing underwriters and one of the selling shareholders in our secondary offering completed in March 2004. The lawsuit alleges securities violations in connection with the failure to disclose payments made pursuant to incentive commission arrangements and seeks damages in an unspecified amount. On October 17, 2006, the District Court dismissed the Amended Complaint without prejudice and granted plaintiffs 30 days to file a second amended, consolidated complaint consistent with the Court’s opinion.
The original complaint charges AXIS and certain of its officers and directors with violations of the Securities Exchange Act of 1934. AXIS is a holding company that through its subsidiaries provides a range of insurance and reinsurance products on a world-wide basis.
More specifically, the complaint alleges that during the Class Period, defendants disseminated materially false and misleading statements concerning the Company's results and operations. The true facts, which were known by each of the defendants but concealed from the investing public during the Class Period, were as follows: (a) that the Company was paying illegal and concealed "contingent commissions" pursuant to illegal "contingent commission agreements;" (b) that by concealing these "contingent commissions" and such "contingent commission agreements," the defendants violated applicable principles of fiduciary law, subjecting the Company to enormous fines and penalties totaling potentially tens, if not hundreds, of millions of dollars; and (c) that as a result, the Company's prior reported revenue and income was grossly overstated.
The complaint further alleges that on October 14, 2004, New York Attorney General Elliot Spitzer announced that he had charged several of the nation's largest insurance companies and the largest broker with bid rigging and pay-offs that he claimed violated fraud and competition laws. On these revelations, the Company's shares fell to $23.36 from $25.89 per share, a drop of 10%.