.. -. -..\ . ORIGINAL
_,.
UNITED STATES DISTRICT COURT ..: I.
SOUTHERN DISTRICT OF NEW YORK
JERROLD RUSKIN and WILLIAM 1068 (LLS)
MITCHELL, on behalf of themselves and "
and all others similarly situated, SECOND AMENDED
CLASS ACTION COMPLAINT
Plaintiffs,
. JURY TRIAL DEMANDED
- against -
TIG HOLDINGS, INC., WILLIAM G.
CLARK and JON W. ROTENSTREICH,
Defendants.
Plaintiffs, by and through their attorneys, and on behalf of themselves
others similarly situated, allege the following based on the investigation conducted by
counsel, as detailed in paragraphs 98 to 99, below (except for those allegations which
to plaintiffs -and their attorneys, which allegations are based on personal knowledge).
NATURE OF THE ACTION
1. This is a securities fraud class action brought by plaintiffs on
themselves and all persons or entities as described below (the "Class"), other than the defendants
and related parties, who purchased or acquired shares of TIG Holdings, Inc. ("TIG" or
"Company") common stock between October 21, 1997 (when TIC announced third quarter
financial results based on materially understated loss reserves) and January 30, 1998 (the day
TlG announced that it was underreserved by $220 miilion), inclusive (the "Class Period"), and
who were damaged thereby.
2. As explained in detail below, defendants engaged in a scheme to
portray TIC's financial performance and quality of earnings, knowing that those earnings were
SNIPPETS:
SOUTHERN DISTRICT OF NEW YORK
Plaintiffs, by and through their attorneys, and on behalf of themselves and all
which allegations are based on personal knowledge).
themselves and all persons or entities as described below, other than the defendants
and related parties, who purchased or acquired shares of TIG Holdings, Inc. ("TIG" or the
supported by a inadequate loss reserves at TIG's "TIG Re" subsidiary.
Officer, to defendant Jon W. Rotenstreich, TIG's Chairman and Chief
Despite their actual knowledge of the "significant reserve problem in TIG
TIG insiders with access to confidential information were engaging in a massive selloff of
to Section 27 of the Securities Exchange Act of 1934, 15 U.S.C. §78aa,
Exchange Act, 15 U.S.C. $78jand.
During the Class Period, plaintiffs and each member of the Class
misleading statements and omissions of the defendants, without knowledge that the price of TIG
reinsurance through its various subsidiaries.
$350,000; "other compensation" and benefits valued at $106,192; 8,889 shares of restricted
TIG's public reports for which he had responsibility to supply data and information and to
- Defendant William G. Clark was, at all times relevant herein,
and governed by the provisions of the Exchange Act, the Individual Defendants had a duty to
state material facts necessary in order to make the statements made,
the Individual Defendants were senior executives
with other corporate officers and employees, attendance at management and Board of Directors
responsible and liable for the representations contained therein.
The Company reported net income of $39.8 million or
The Hutson Memo establishes defendants' actual knowledge that TIG's
The Class Period insider selling was unusual in its amount.
Plaintiffs bring this action as a class action pursuant to Rules 23and
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