A multi-million dollar law suit against Stirling Cooke Brown Holdings Ltd charging the company with fraud and racketeering was yesterday thrown out of court by a US Federal Judge.

The damaging law suit, which has kept the Bermuda-based brokerage Stirling Cooke in the headlines for over a year and helped push stock prices from $30 to $3, was filed in April last year by Odyssey Re.

The reinsurance company claimed Stirling Cooke Brown was part of a fraudulent scheme to "improperly extract millions of dollars in commission and fees'' on business it brokered.

Stirling Cooke have always maintained their innocence and countered with the claim that Odyssey was simply attempting to avoid reinsurance claims.

Stirling Cooke Brown's chief executive Stephen Crane said yesterday: "The judge in the US District Court has dismissed the case. It was not a surprise that he dismissed it, but the timing was. We hadn't heard anything. Odyssey had really pushed the envelope on trumped up charges and ultimately the judge saw through it.'' Mr. Crane now hopes that there will be no further legal action from Odyssey, but says there is the possibility of the reinsurance company brining separate charges in the UK.

Stirling Cooke has always denied allegations about its involvement in a scheme to trick reinsurers into accepting underpriced workers' compensation business in the US as "wholly without merit''.

Odyssey Re (London) Ltd.'s lawsuit named many defendants. Among them was Stirling Cooke's North American operations -- one of very few US defendants.

Most of those named as defendants operate in the UK, as do Stirling Cooke's reinsurance and insurance brokerages.

The lawsuit said underwriting agent Euro International Underwriters Ltd.

accepted workers' comp business brokered by Stirling Cooke Brown North American Reinsurance Intermediaries Inc. despite the fact the companies were only authorised to write personal-accident business.

That would have been limited to risks like accidents, kidnap and ransom insurance, travel accounts and sport-injury risks.

But Stirling Cooke has attacked the lawsuit for never pinpointing the fraud allegedly committed, and only "attributing the alleged misconduct generally and collectively to 14 defendants''.

Stirling Cooke also hit back by maintaining that in the London market personal-accident business includes the health and accident portion of workers' compensation risks.

The Odyssey suit was the most visible case in a stream of legal actions facing the company which have tarnished the name of the brokerage firm.

Judge throws out lawsuit Stock analysts blamed the falling stock value on the company's damaged credibility as a result of the Odyssey law suit.

Stirling Cooke announced last year that to stop its sliding stock price it had hired consultants Donaldson, Lufkin & Jenrette to examine "strategic alternatives'' like selling up or working with a partner.

The business has faced huge losses and rising costs in fighting a number of lawsuits brought against the company in the field of worker compensation.

Mr. Crane was hired three months ago and has been charged with reestablishing the company's reputation.

When asked if it would affect the business in Bermuda he said: "Only in so far as it affects the whole company. This has been a significant distraction to the organisation and has contributed to some morale issues. This decision will be a real shot in the arm for our people.'' Teaming up: Tom Coelho and James Fitzgerald COURTS CTS