Bermuda insurer and reinsurer Quanta Capital Holdings Ltd. has been accused of violating US federal securities laws in a class action lawsuit filed in the US District Court in New York.

Two US law firms last night announced their involvement in the action, which is on behalf of those who bought Quanta shares during the class period ? between December 14, 2005 and March 2, 2006.

Brower Piven, of Baltimore, and Federman and Sherwood, of Oklahoma City, said the filing claimed that Quanta had issued a series of materially false and misleading statements to the market during the class period.

Those statements had artificially inflated the Bermuda insurer and reinsurer?s stock price, the law firms said.

Brower Piven?s statement said: ?No class has yet been certified in the above action. If you are a member of the proposed class, you may retain counsel of your choice, and you may move the court no later than April 6, 2007 to serve as a lead plaintiff for the proposed class.

?In order to serve as a lead plaintiff, you must meet certain legal requirements. To be a member of the proposed class you need not take any action at this time.?

Quanta is in the process of running off most of its specialty insurance and reinsurance lines, as it announced in May 2006.

No-one from either law firm was available for comment last night, nor at Quanta?s offices in Cumberland House, in Victoria Street, Hamilton.

In the third quarter of 2005, Quanta lost $59.1 million, and followed with a $54.7 million loss in the fourth quarter. And in the first quarter of 2006, it posted another loss of $17.1 million. Those losses were on top of about $50 million in storm losses from the 2004 hurricane season.

On January 11 last year, Quanta revealed that its net losses related to a ruptured oil pipeline in California would be $4.9 million more than the $7.5 million it previously estimated. On a gross basis, the accident?s loss was to be revised upward by $8.3 million, a regulatory filing with the Securities and Exchange Commission said.

In March last year, A.M. Best adjusted Quanta?s rating, downgrading the company from its ?A-? rating after it said fourth-quarter losses were expected to be double earlier estimates.

An insurer who sees its rating fall out of the ?A? range will generally struggle to attract clients.

In June, A.M. Best downgraded Quanta?s financial strength rating for a second time, from ?B++? to ?B?. By that time the company had already announced it had placed its business into run-off.

Quanta paid out a number of large severance packages as top executives departed the four-year-old company. They included the heads of its US and Bermuda reinsurance units, its chief financial officer, its chief executive officer and founder Tobey Russ and its chief claims officer.

The law firms made their announcement after the close of trading last night.

Quanta?s share price fell 2 cents to $2.08 yesterday. It has traded in a 52-week range between $5.41 and $1.22.