Quanta Wins Dismissal Of Suit Over Stock Offering

Quanta Wins Dismissal Of Suit Over Stock Offering - 1/27/2009

Home

Index of Filings

News and Press Releases

Filings

Decisions

Settlements

Litigation Activity Indices

Top Ten List

Annual/Quarterly Updates

Clearinghouse Research

Articles & Papers

Search

Related Sites

About Us

Local Rules

Sponsors

Register

_______________
Copyright © 2001
Stanford Law School

2009 News and Press Releases

SEARCH

News	News 2009
HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

DISMISSAL NEWS:

Quanta Wins Dismissal Of Suit Over Stock Offering
Christine Caulfield

Securities Law 360. January 27, 2009
_________________________________________________________________________

EXCERPT: A federal judge has dismissed a securities class action against insurance company Quanta Capital Holdings Ltd. and its top executives, saying the shareholder plaintiffs had failed to make a case for fraud. […] Quanta also misled investors when it estimated its losses stemming from a Pacific Energy oil spill at just $7.5 million, the plaintiffs said. The court was told Quanta admitted in its 2006 annual report to the U.S. Securities and Exchange Commission that it had found material weaknesses in internal controls over financial reporting. Quanta, which touted itself as a specialty insurer, offering insurance and reinsurance for “risks that are often unusual or difficult to place,” told the SEC that it had not maintained enough skilled accounting personnel and had heavily relied on spreadsheets requiring manual input of data and formulas. “As a result of the material weaknesses described above, management concluded [that the company's] internal control over financial reporting was not effective as of Dec. 31, 2005,” the insurer said in its regulatory filing. On March 31, 2006, the company further revealed that it had been removed from the approved list of several major insurance brokers, including Aon Corp. and Marsh Inc. On the first trading day following that announcement, Quanta's stock price fell by 10%, the court was told. The suit claimed Quantas' misleading statements had artificially boosted the price of its common stock between October 2005 and April 2006, resulting in investor losses when the stock price corrected. In granting Quanta's motion to dismiss, Judge Patterson said the suit had failed to establish the requisite intent on the part of the insurer and its directors and officers to mislead investors. “There is no assertion that defendants had knowledge of the material weaknesses in financial reporting at the time the statements were made,” Judge Patterson said.

Back to News page | Back to Archived News 2009 page | Back to Top

�