Zurich Financial settles SEC charges, fined $25M

[Robbien]

Source: Business Week

Zurich Financial Services Group on Thursday agreed to pay a $25 million penalty to settle federal regulators' charges of civil securities fraud in connection with insurance transactions.

. . .

The SEC alleged that Zurich Financial and later Converium improperly used reinsurance accounting for three transactions, enabling the Swiss companies to artificially inflate their performance figures. The sham transactions were designed to make it appear that risk had been transferred to third parties when it actually remained with entities under Zurich Financial's control, the SEC said.

The misconduct allowed Zurich Financial to receive a substantial windfall when it spun off Converium, according to the SEC.

. . .

"Today's cases against Zurich and Converium, along with the previous enforcement actions brought by the SEC in this area, have been critical in curbing a widespread industry practice," James Clarkson, acting director of the SEC's regional office in New York, said in a statement.

Companies caught up in the investigations include insurers Ace Ltd., American International Group Inc, RenaissanceRe Holdings Ltd., MBIA Inc., and General Reinsurance Corp., a subsidiary of billionaire Warren Buffett's Berkshire Hathaway Inc.

Read more: http://www.businessweek.com/ap/financialnews/D950R6GO0.htm

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Zurich committed fraud and was slapped on the wrist with a small fine. The business community labels it just a little bit of misconduct. Previously AIG, and the many of the rest in the insurance industry have been caught doing the same thing and have been punished in the same manner.

All promised to be good little boys in the future.

SEC believes fines deter others in the industry from doing the same thing. Sure didn't deter Zurich.

[pattmarty]

1. AND, just look at all the ones that were actually fucking rewarded.........

............for unethical and probably if someone actually wanted to dig further into this illegal shit.

[earcandle]

2. This is bullshit.

How can Gov B be ripped a new ahole and pushed into
impeachment or resignations for mouthing off, while these guys
who commit actual fraud have no consequences?  

WE don't have two sets of laws, do we?  

[No Elephants]

3. Which accounting firm(s) worked with the wrongdoers and were the accounting firms fined?