• Former Tyco chief executive officer Dennis Kozlowski and former chief financial officer Mark Swartz have sued Twin City Fire Insurance, a unit of Hartford Financial Services Group, to force it to pay their legal bills, according to the Associated Press. The duo, who face a retrial this January on charges they stole $600 million from the conglomerate, have already exhausted $25 million of coverage provided by Federal Insurance Co., according to the report; the Twin City policy would provide an additional $25 million.
• The Securities and Exchange Commission upgraded its probe of Fannie Mae’s accounting practices into a formal investigation after commissioners voted to give SEC staff the power to subpoena documents and testimony from witnesses, according to Friday’s Washington Post, citing sources briefed on the case. Also last week, Fannie was ordered by federal prosecutors to preserve documents that relate to an ongoing criminal investigation, the paper added.
• The Allstate Corp. announced that catastrophe losses related to the recent hurricanes in Florida and the Southeast amounted to more than $1 billion in the third quarter. “More than 205,000 claims have been received from policyholders for damage caused by this unprecedented series of hurricanes,” said chairman, president, and chief executive officer Edward M. Liddy, in a statement.
In a related announcement, Chubb Corp. said that it expects to record a pretax loss of about $180 million stemming from hurricane-related claims.
• SunTrust Banks Inc. announced that the Securities and Exchange Commission has launched an informal inquiry into the circumstances surrounding the bank’s recent announcement that it expects to restate its financials for the first and second quarters of fiscal 2004.