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Farifax Financial CEO Prem Watsa (Charla Jones/The Globe and Mail)
Farifax Financial CEO Prem Watsa (Charla Jones/The Globe and Mail)

U.S. court dismisses class action against Fairfax Add to ...

Fairfax Financial Holdings Ltd. says a U.S. appeals court has dismissed a class-action suit that claimed the Toronto-based firm engaged in securities fraud.

The insurance and financial services company said Friday the United States Court of Appeals approved the plaintiffs’ agreement to voluntarily dismiss the suit with prejudice after first filing an appeal to an earlier lower court ruling.

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The lawsuit was originally filed by Gilman and Pastor LLP in the United States District Court for the Southern District of New York on behalf of investors who bought shares of the company between May 21, 2003, and March 22, 2006.

The lawsuit alleged the company failed to disclose that its revenues and earnings were negatively affected by increased competition and a number of significant operational problems that existed at the company.

But Fairfax says the action, was “substantially identical” to a suit filed against it in 2006 by another group of plaintiffs that had already been dismissed with prejudice, which prevents similar claims in the future.

The company said neither it, nor any of the other defendants in the claim made any settlement or payment to any of the plaintiffs.

In a separate case, a New Jersey court last month dismissed a lawsuit filed by Fairfax that accused a group of hedge funds of conspiring with financial analysts to drive down its share price.

Fairfax said it would appeal the decision.

The lawsuit was filed in 2006 and alleged a number of U.S. hedge funds participated in a stock market manipulation scheme that “severely harmed” the insurance giant.

Fairfax, which is involved in property and casualty insurance and reinsurance, investment management and insurance claims management, has operations in the U.S. and Canada.

 
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