Don Schuster, of The Torrenzano Group, of New York, was hired by Stirling Cooke earlier this year to improve its public relations, which, until that point, included a policy of not taking Inside Bermuda's telephone calls. However, as you should gather from a question and answer session below, the main change from the 'No Comment' days of Mark Cooke and Nicholas Brown, who have both been fired as officers in recent months, is that the company now takes more words to say not very much at all.
Stirling Cooke Brown Holdings has refused to explain a mysterious $1.4 million investment write-down that was disclosed in its latest 10Q filing with the SEC. The company is being so secretive about the write-down that it has created an irresistible impression that it has something to hide.
Stirling Cooke Brown Holdings Ltd. has filed a motion to dismiss an amended RICO complaint filed against it by Odyssey Re at federal court in New York.The Bermuda-based broker/reinsurer claims that the amended complaint "contains no new causes of action against Stirling Cooke".
The Clarendon Insurance Group has terminated a substantial business production agreement with New York-based Eton Management, which is run by notorious businessman Martin Hoffman.
The Bermuda-based Stirling Cooke insurance group is a shareholder in a little-known reinsurer called Alternative Risk Reinsurance Company Limited that is registered in the Cayman Islands and managed by Mutual Risk Management (Cayman) Limited.
Inside Bermuda has obtained specific details about four of the seven lawsuits filed against Stirling Cooke Brown Holdings and/or related entities in the High Court of Justice, Queen's Bench Division Commercial Court, in the UK.
In February, Offshore Alert reported about stock manipulation allegations involving Bermuda Stock Exchange-listed Mezzanine Capital; Viktor Kozeny, the 'Pirate of Prague' who allegedly defrauded his countrymen in the former Czechoslovakia of tens of millions of dollars before fleeing, buying an Irish passport and going to live in the Bahamas, has apparently fallen out with the Grenada government, according to Grenada Today newspaper; A letter to the editor that was published in the Caymanian Compass newspaper on August 20, 1999 caused rum amusement in knowledgeable law enforcement circles; and In the ten days after we posted the Harris Organization/OBNR libel judgment on our web-site, 638 people had downloaded the entire 17 pages, making it the most popular document on the 'Free Documents' section of our web-site.
Stirling Cooke Brown Holdings has suffered a major setback in an arbitration held recently in London. The arbitration panel decided by three votes to nil to rescind reinsurance contracts for 1993 and 1994 that the San Francisco-based Transamerica insurance/financial services group had with Duncanson & Holt, Chubb Insurance Group and Chubb-subsidiary Federal Insurance Company.
Odyssey Re (London) Limited has filed an amended complaint against Stirling Cooke Brown Holdings, several of its subsidiaries and other parties at the U. S. District Court for the Southern District of New York.
US and Canadian insurers this month started three new legal actions that will help to determine who will pay for the huge losses associated with the Unicover workers' compensation insurance pool. Sun Life Assurance Co. of Canada announced it had started arbitration to void Unicover-related reinsurance contracts, Phoenix Home Life Mutual Insurance Co. filed a lawsuit in the United Kingdom in an attempt to force a broker, Rattner Mackenzie, to reveal more information about Unicover and it is also believed that Lincoln National Life has filed a suit.
Ever wondered who controlled Bermuda's major insurers and reinsurers? Here is a breakdown of the major shareholders of the island's publicly-listed companies.
Mark Cooke this month stepped down as CEO of Goldman Sachs-controlled Stirling Cooke Brown Holdings following the company's disastrous performance since going public in November, 1997. But the man promoted to temporarily replace him and steady the firm in the face of widespread fraud allegations was himself accused of impropriety with his previous employer, we can reveal. Len Quick, 57, who was previously the head of Stirling Cooke's North American operations, was elevated to Chief Operating Officer of the group and interim CEO until a permanent replacement for Cooke is found.
Beleaguered Stirling Cooke Brown Holdings Ltd. is laying off staff in Bermuda and is in the process of moving its Bermuda-based broking activities to London, Inside Bermuda has been told. The move comes after Goldman Sachs, which is the biggest single shareholder in Stirling Cooke, told management that it was taking more control of the company, said a source.
As I flew out of Bermuda on June 10 after narrowly surviving an attempt by Donald Lines' attorney, Robin Potts, to have me put in prison for contempt of court for refusing to reveal my sources in relation to articles I wrote about Bermuda Fire & Marine Insurance, who should I bump into on the flight to Atlanta but one of Donald's sons, Brian Lines, who is the President of Lines Overseas Management, which has been on the receiving end of several unflattering articles in this newsletter; Some of the UK's leading attorneys have made Bermuda their home for the next several months as they work on two of the biggest civil trials in the island's history: The Bermuda Fire & Marine Insurance Company case and a trust dispute involving the Thyssen-Bornemisza family, which has a $2.7 billion fortune; What was it like sitting in front of Britain's finest while they debated for two days whether to lock me up for seven days for contempt of court? Not much fun, I can tell you; The lengths that crooks will go to in order to lend credibility to their scams knows no shame; and Beleaguered Stirling Cooke Brown Holdings Ltd. is laying off staff in Bermuda and is in the process of moving its Bermuda-based broking activities to London, we have been told.
XL Capital President and CEO Brian O'Hara has topped a list that measures the value of shares that officers of Bermuda-based, publicly-listed insurers own in their own company. O'Hara is the beneficial owner of shares worth approximately $64.6 million in XL Capital, according to a review conducted by Miami-based Offshore Business News & Research, Inc., which publishes this newsletter.
The Boston-based Fidelity Management and Research group is the broadest investor in the Bermuda insurance market, XL Capital has the oldest directors and the directors of Stirling Cooke Brown Holdings are not only the youngest - with an average of just 40 - but also the fewest in number. Directors and officers of Stirling Cooke also own more of their company than for any other firm. These are some of the results of a comprehensive survey of the ownership and governance of Bermuda-based, publicly-listed insurance entities by Miami-based Offshore Business News & Research Inc., which publishes this newsletter.
The senior management of PartnerRe gave investors the best value for money in fiscal 1998, according to a review by Inside Bermuda.
May was another bad month for Stirling Cooke Brown Holdings, which suffered the resignation of a director, announced that it had become involved in yet another arbitration in London and reported that quarterly earnings were down by 11 per cent and that projected annual net income for fiscal 1999 is 25 per cent less than in 1998. The resignation of director Warren Cabral, effective May 13, came a month after the company's auditor, KPMG Peat Marwick, resigned.
RenaissanceRe's President and CEO, James Stanard, was the best compensated officer of a Bermuda-based, publicly-listed insurance entity for the second consecutive year in fiscal 1998, according to a compensation review by Miami-based Offshore Business News & Research, Inc., which publishes this newsletter.
Stirling Cooke Brown Holdings has filed a motion for early dismissal of the lawsuit brought in New York last month by Odyssey Re (London) Ltd. alleging racketeering and fraud."Our motion for early dismissal is Stirling Cooke's next step in aggressively
Hannover Re's purchase of the Clarendon insurance group is already causing the German reinsurer problems. On April 1, less than five weeks after the deal was completed, Hannover Re's stock was downgraded by investment bank Goldman Sachs due to concerns over Clarendon's exposure to the now infamous Unicover reinsurance pool.
April was yet another disastrous month for Stirling Cooke Brown Holdings as its share price fell by 60 per cent and KPMG Peat Marwick resigned as its auditor after just two years. The company also announced it planned to hire a financial adviser to "explore ways to boost shareholder value", a move which often signals that a company is considering putting itself up for sale.
Anne Kast, the Bermuda-based investment advisor who runs the Bermuda Insurance Index Fund, may have been ruing the timing of a recent full-page advertisement in The Royal Gazette newspaper. In an effort to drum up business for the fund, which was launched last year at $10 and is now at $9.40, readers were treated to massively optimistic buy recommendations of Bermuda's insurance stocks from analysts such as Morgan Stanley, Prudential, Merrill Lynch and Warburg Dillon.
Hannover Re's decision to finally go ahead with its purchase of the Clarendon insurance group after six months of deliberation has surprised several people in the industry who view the acquisition as a 'Beauty and the Beast' arrangement. But it appears that the deal, which finally closed at the end of February, may have substantially altered since it was first announced last August.
Stirling Cooke Brown Holdings and some of its subsidiaries, affiliates and officers have been accused of engaging in widespread fraud to the detriment of mostly US insurers and reinsurers in a lawsuit filed by Odyssey Re (London) on March 29 in the United States District Court for the Southern District of New York. As with lawsuits and arbitration proceedings involving Stirling Cooke in London, the company has been accused of running reinsurance spirals purely to generate brokerage commissions and underwriting management fees for itself regardless of the consequences to insureds and reinsureds.
Although readers of this newsletter have known for several months about the arbitrations that Stirling Cooke Brown Holdings has been involved with in London, the company only declared the hearings to the SEC this month in its 10 K filing. The company also disclosed that it is a defendant in seven different lawsuits filed in 1998 by reinsurers and reinsureds alleging fraud.
Serious questions about the future of Stirling Cooke Brown Holdings are being raised following the filing of a lawsuit in New York accusing the firm of racketeering and fraud and the collapse of its share price to an all-time low on NASDAQ. The company has also disclosed for the first time in its SEC filings that it is involved in several arbitrations in the UK and is also a defendant in seven different lawsuits that were filed last year by reinsurers and reinsureds claiming to have been defrauded.
For the second consecutive year, the common stock of Mutual Risk Management has outperformed all other Bermuda-based, publicly-listed companies operating in the insurance/reinsurance sector. MRM's stock achieved a total investment return of 31.39 per cent for 1998, way ahead of its nearest rival, EXEL, which returned 20.93 per cent to investors. MRM's stock has now returned 100 per cent in two years.
Lloyd's Regulatory Board, the body that regulates the Lloyd's of London market, is soon to begin an investigation into Bermuda-based Stirling Cooke Brown Holdings that, in the worst scenario, could lead to the company's Lloyd's broking licence being suspended or even revoked.
Robert Ferguson, who is the President of the US/Bermuda-based Clarendon insurance group, was in Germany from January 20-23 in a last ditch bid to save the proposed sale of the company to German giant Hannover Re, we have been told. Although the outcome of his visit was not known to us at publication time, Ferguson told acquaintances before the trip that the deal was "99 per cent dead", according to a source.
The seemingly never-ending flow of negative information that is passed our way about Bermuda-based Stirling Cooke Brown Holdings Limited continued this month when our attention was drawn to Page 43 of the 1994 'Wishful Thinking' report published by a US congressional sub-committee chaired by John Dingell. The content of this page formed part of a look at the illegal activities of Carlos Miro, who received a lengthy prison sentence in the US for insurance fraud in connection with his Louisiana-based company, Anglo-American Insurance, which also had a UK arm.
The share price of Stirling Cooke Brown Holdings has endured a roller-coaster ride on the NASDAQ stock exchange since our disturbing revelations about the company last month. Following our story, the share price quickly dropped to an all-time low of $11.125, which represented a 63 per cent drop in just five months and a fall of 49 per cent on its IPO price of $22 last November when the company was taken public by Goldman Sachs.
Receivers of the Florida Employers Safety Association Self-Insurers Fund sue David Sanz, share price of Stirling Cooke falls to new low on NASDAQ, Elite International Services offers dubious offshore products, Marc Harris on the move, prison inmate Ronald Williams apparently continues to rip people off during his day-release program, Bahamas Prime Minister Hubert Ingraham puts both feet in his mouth during press conference for murder of foreign national.
An extract that mentions the Clarendon Insurance Group that appeared in the 'Failed Promises' report into the insurance industry that was published in the early 1990s by a US Congressional committee chaired by John Dingell.
The FTSE/BSX Bermuda Insurance Index, which was launched on July 15, 1998 with a value of 1,000 and broadly tracks the performance of the island's insurance market, had lost 22 per cent of its value by September 29, falling to 773.36. Such a large fall could indicate it might be an opportune time to buy into the Bermuda Insurance Index Fund Limited, which received approval this month to list up to 10 million non-voting common shares.
Virtually every insurance or reinsurance contract written in Bermuda these days has a clause stating that claims disputes should be arbitrated, rather than litigated. The intention is to save money and time but a massive drawback for insurance and reinsurance buyers is that, unlike lawsuits, arbitrations are held in secret so you never know who the bad payers are or which companies have practices that border on the criminal.
Two reports into Stirling Cooke Brown that were compiled two years ago by a London firm of insurance investigators on behalf of a client gives an interesting insight into the history of the Bermuda-based insurance broker, particularly allegations that the company was involved in a reinsurance spiral. The alleged spiral that we have been told has dragged Stirling Cooke and the Clarendon group into arbitrations in London at least partly involves North American Fidelity & Guarantee and Stockholm Re (Bermuda).
As the share price of Stirling Cooke Brown Holdings Limited continues to plummet for reasons that appear unrelated to the general market slide, Inside Bermuda has uncovered fresh evidence that casts an extraordinarily negative light over the company and its main business partner, the Clarendon insurance group.
Two applications have been filed at Bermuda Supreme Court recently in relation to an arbitration between Stirling Cooke Brown subsidiary Raydon Underwriting Management and Stockholm Re (Bermuda), which folded a few years ago.
Businessman David Sanz was criminally indicted in the US last month to face charges of racketeering, grand theft and fraud in relation to Florida-based Gulf Atlantic Management Group Inc., which he owned. The offences include an allegation that Sanz illegally stripped off millions of dollars from GAMG over several years and, in a final flourish as the regulatory net closed in, sold its entire book of business of GAMG and that of a related company to Stirling Cooke Insurance Services for $1 million.
Annual statements filed with regulators by Clarendon National Insurance Company are becoming increasingly confusing, not to mention inaccurate in places. Take, for example, its 1996 filing with the New Jersey State Insurance Department, the home regulator for this operating arm of a group that has subsidiaries in Bermuda and the US.
The Bermuda Stock Exchange will next month launch an index and mutual fund that will track the performance of ten publicly-listed insurers and reinsurers based in Bermuda.
Stirling Cooke Brown Holdings, a publicly-listed company over which there are several question marks, has reported a profit of $4 million for the three months ended March 31, 1998 - a 41 per cent increase on the same period a year earlier. The company reported that revenues went up by 39 per cent to $19.9 million, while reporting that expenses also increased by 39 per cent to $15 million.
RenaissanceRe president and CEO James Stanard has topped a survey valuing the shareholdings held by the top officers of Bermuda-registered publicly-listed insurers in their own companies, with a stake valued at $48.7 million on March 16, 1998.
An accountant who participated in one of the world's best-known insurance frauds is currently working for Bermuda-based insurance group Stirling Cooke Brown Holdings as a financial accountant, we can disclose. Brian J. Hynes, former managing director of Carlos Miro-owned Anglo-American International Reinsurance Co., is employed by Stirling Cooke at its London office.
Anyone doing business with the Clarendon Insurance Group should take a close look at further evidence we have obtained which clearly shows that either a senior officer of the group is lying about its relationship with a dubious business producer or the producer is submitting fraudulent documents to the London insurance market. Either way, the Clarendon officer who may have lied to us, Thomas Corteville, vice president/financial operations of Clarendon National Insurance Company, seemed more concerned with attacking this newsletter than analyzing the facts.
Two subsidiaries of Bermuda-based reinsurers were recently granted licences to operate in the Cayman Islands. Stockton Reinsurance (Cayman) Limited, which was incorporated on July 29, 1997, received a restricted Class B licence, which allows the licensee to cover only the risks of its parent company.
Investors contemplating taking part in the $50 million IPO of Bermuda-based insurance broker/risk manager Stirling Cooke Brown Holdings Limited, which is 24 per cent owned by Goldman Sachs, may be interested in a few details they will not find in the company's share prospectus. Perhaps the most noteworthy is the involvement of its subsidiary Raydon Underwriting Management in one of the world's largest insurance frauds. Raydon, which shares offices with Stirling Cooke at Victoria Hall, Hamilton, had the dubious distinction of managing reinsurer North American Fidelity & Guarantee.