Converium Holding AG ("Converium" or the "Company"), through its subsidiaries, is a multinational company that provides reinsurance products.

The original Complaint charges Converium and certain of its officers with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to Defendants or recklessly disregarded by them: (1) that Converium maintained inadequate loss reserves in its Converium North America subsidiary; (2) that the Company, contrary to representations, did not establish adequate loss reserves to cover claims by Converium North America policy holders; (3) that reserve increases announced by the Company during the Class Period were materially insufficient; and (4) as a consequence of the understatement of loss reserves, Converium's earnings and assets were materially overstated at all relevant times.

The Complaint further alleges that on July 20, 2004, Converium announced that second quarter results would be impacted by a reserve strengthening for US casualty business and subsequent asset impairments on the balance sheet of Converium Reinsurance. News of this shocked the market. Shares of Converium fell $11.12 per share, or 44.44 percent, on July 20, 2004, to close at $13.90 per share. On August 31, 2004, Converium announced that the Company had completed external actuarial review of Converium's reserves. On September 2, 2004, Converium announced that following the announcement of the external reserve review's outcome and resulting capital measures, Standard & Poor's and A.M. Best have lowered their ratings on Converium and its subsidiaries. On this news, shares of Converium fell an additional $1.04 per share, or 10.51 percent, to close at $8.86 per share.

In October 2004, the first of several securities class action Complaints were filed in the U.S. District Court for the
Southern District of New York against Converium, ZFS, and certain of Converium's officers and directors.

On July 14, 2005, Judge Mukasey of the District Court for the Southern District of New York appointed the Public Employees' Retirement System of Mississippi as lead Plaintiff in the Converium securities fraud litigation, together with Avalon Holdings, Inc., a private institutional investor.

The court also approved Mississippi's and Avalon's selection of three law firms, Bernstein Litowitz Berger & Grossmann LLP, Spector Roseman & Kodroff, PC and Cohen Milstein Hausfeld & Toll, P.L.L.C. as lead Counsel for the Class. Lead Counsel conducted an extensive investigation of the action, which included interviews with the former Converium employees who had been directly involved with the establishment of the Company's loss reserves -- which are the focus of the litigation.

On Sept. 23, 2005, Mississippi and Avalon filed the Complaint based upon the detailed facts developed through lead Counsel's investigation. The Complaint alleges violations of the U.S. Securities Exchange Act of 1934 by Converium, and its CEO Dirk Lohmann, CFO Martin Kauer, and North America CEO Richard Smith, as well as by Zurich Financial Services, Converium's parent company prior to its IPO.

In addition to these Exchange Act claims, which had been asserted in the Complaints filed prior to the appointment of Mississippi and Avalon as lead Plaintiffs, the Complaint also asserts claims under the Securities Act of 1933 against Converium, Zurich, Lohmann, Kauer, Smith and the Company's current and former directors. In addition, the Complaint asserts claims under the Securities Act against UBS AG and Merrill Lynch International, which served as co-lead underwriters on Converium's IPO.

On Dec. 23, 2005, the Defendants moved to dismiss the Complaint on a variety of substantive and procedural grounds. On Feb. 17, 2006, the lead Plaintiffs filed a brief in opposition to those motions, and contemporaneously moved to strike certain exhibits the Defendants had submitted in support of their motions.

On March 1, 2006, Converium restated its Dec. 31, 2000 financial statements acknowledging that the Company, at the time of the IPO, overstated its pre-tax income by nearly $100 million. In response, Mississippi and Avalon, on April 21, 2006, filed a motion seeking leave to file a Second Amended Class Action Complaint incorporating new allegations against the Company arising out of the restatement. Judge Mukasey took no action on that motion, or on the pending motions to dismiss.

In September 2006, the case was reassigned to Southern District of New York's Judge Denise Cote. Judge Cote held a case status conference on Nov. 16, 2006, and subsequently issued an order allowing the lead Plaintiffs to make several changes to the proposed Second Amended Complaint. The revisions made to the proposed Second Amended Complaint include adding eight additional underwriters of Converium's initial public offering as Defendants, adding as named Plaintiff an individual whose case was consolidated with lead Plaintiffs' action, and dropping claims against two Defendants (who remain Defendants under other causes of action).

On Dec. 1, 2006, the lead Plaintiffs filed a motion seeking leave to file the second amended Complaint. On Dec. 28, 2006, Judge Cote issued an opinion which granted in part and denied in part Defendants' motions to dismiss the original Complaint.

In issuing his opinion, Judge Cote ruled that the lead Plaintiffs' motion to file the Second Amended Class Action
Complaint was moot. In the motion to dismiss ruling, Judge Cote sustained the Exchange Act claims asserted against Converium and the Officer Defendants, with the exception of those claims arising out of the statements made in connection with the IPO. Judge Cote dismissed the claims arising under the Securities Act, holding that all such claims were barred by the applicable statute of limitations.

On Jan. 12, 2007, the lead Plaintiffs filed a motion for reconsideration of the dismissal of the Securities Act claims
and of the Exchange Act claims arising out of the statements made in connection with the IPO. On April 9, 2007, Judge Cote entered an order granting in part the lead Plaintiffs' motion for reconsideration. Specifically, Judge Cote granted the request to reconsider the dismissal of the Exchange Act claims, but denied the motion as to the Securities Act claims. With regard to the Exchange Act claims, the Court noted that certain additional arguments raised in Defendants' motions to dismiss the Exchange Act claims, which the Court had not addressed in its initial ruling on those motions, remain to be ruled upon.

On Sept. 14, 2007, Judge Cote ruled on the lead Plaintiffs' Exchange Act claims regarding the statements made in connection with the IPO, denying the Defendants' motion to dismiss with regard to those statements.

Contemporaneous with the briefing on the lead Plaintiffs' motion for reconsideration, lead Counsel conducted extensive discovery relating to the claims and the underlying events and transactions alleged in the Complaint, including the review of nearly four million pages of documents produced by Defendants and third parties and the deposing of approximately twenty-seven fact witnesses.

On Sept. 4, 2007, Judge Cote preliminarily approved a $30-million settlement between the Class and Converium's former parent company ZFS.

On Sept. 28, 2007, the lead Plaintiffs moved to certify the Plaintiff class. On Oct. 19, 2007, the Defendants opposed lead Plaintiffs' motion.

On March 6, 2008, Judge Cote issued an opinion and order which partially granted the Plaintiffs' motion, certifying a Plaintiff class that includes all domestic purchasers of Converium shares on the SWX Swiss Exchange ("SWX") and Converium American Depositary Shares ("ADS") on the New York Stock Exchange, as well as foreign purchasers of ADSs on the NYSE.

Foreign purchasers who bought shares of Converium on the SWX were excluded from the class on the basis that there was insufficient evidence of subject matter jurisdiction over their claims.

Judge Cote also certified Mississippi as Class Representative, but found that Avalon could not serve as a class representative or as co-lead Plaintiff because it was a foreign purchaser on the SWX.

Judge Cote also moved the starting date of the Class Period from Dec. 11, 2001, to Jan. 7, 2002, on the grounds that the market in Converium shares did not become fully capable of absorbing and reflecting all available information about the Company until after the end of the "quiet period" that followed Converium's December IPO.

On March 20, 2008, Mississippi and Avalon moved for reconsideration of the Court's ruling as to the excluded foreign purchasers in light of additional evidence, uncovered in discovery, of subject matter jurisdiction over their claims. On March 26, 2008, Mississippi and Avalon moved the Court for leave to file a second amended Complaint.

On July 28, 2008, Public Employees' Retirement System of Mississippi and Avalon Holdings, Inc. announced that they had reached agreements with SCOR Holding (Switzerland) AG, the successor to Converium, and ZFS, Converium's former parent, to resolve the claims of investors who purchased Converium shares and American Depositary Shares during the period from Jan. 7, 2002, through Sept. 2, 2004.

The settlement amounted to $84,600,000 in cash, consisting of $75 million paid by SCOR Holding and $9.6 million paid by ZFS.

On July 2008, the lead Plaintiffs filed a motion for preliminary approval of the settlements. On Aug. 11, 2008, Judge Cote preliminarily approved the proposed settlement and scheduled a hearing for Dec. 21, 2008, to consider final approval of the deal.

On December 12, 2008, District Court Judge Denise L. Cote signed the Final Judgment and Order approving the settlement. On December 17, 2008, lead Counsel was awarded attorneys' fees in the amount of 20% of the $84.6 million Settlement Amount and $4,551,000.00 in reimbursement of litigation expenses.

On January 9, 2009, a Plaintiff filed Notice of Appeal to the United States Circuit Court of Appeals for the Second Circuit from: (a) that portion of the District Court's Opinion and Order dated December 28, 2006 dismissing the claims brought under the Securities Act of 1933, as untimely; (b) the District Court's Order also dated December 28, 2006 denying the motion to amend the Complaint; (c) those portions of the District Court's Opinion and Order dated April 9, 2007 denying the request for reconsideration of that dismissal and motion to amend; and (d) the District Court's Order and Final Judgment dated December 12, 2008. On July 8, 2009, the appeal was withdrawn.