2nd Cir. Upholds Dismissal of Bermudian Reinsurer’s Securities Action

NEW YORK — A federal appellate panel has upheld dismissal of an action in which a Bermudian reinsurer accused a holding company of violating the Securities Exchange Act by fraudulently inducing it to purchase $5 million in stock, agreeing with the lower court that the transaction was foreign and therefore does not fall under the Act.

On Jan. 25, the 2nd Circuit U.S. Court of Appeals panel explained that the transaction was between two Bermudian companies and thus “predominantly foreign.”

Cavello Bay Reinsurance Ltd. is a Bermuda company owned by Enstar Group Ltd. In 2015, Spencer Capital Ltd., a private …