Investors who bought shares in Bermuda company Security Capital Assurance Ltd. (SCA) last June have joined two class action complaints, in which XL Insurance Ltd. is named as one of the defendants.

The actions concern SCA shares worth $300 million, which were bought by investors at a price of $31 in a secondary offering after being sold by XL Insurance, which is a subsidiary of Bermuda-based XL Capital Ltd.

The actions were filed at the US District Court for the Southern District of New York on December 7 and 18, according to the web-based newsletter published by KYC News, Inside Bermuda.

SCA has been badly affected by the sub-prime mortgage meltdown in the US and its shares have since plummeted to less than a tenth of their value in June.

The complaints filed claim that SCA published inaccurate information at the time of the secondary offering, with regards to SCA's exposure to credit derivatives and sub-prime mortgage-linked risks.

According to the plaintiffs, all the shares in question were sold by XL Insurance. Defendants in both actions are XL Insurance, SCA, Paul Giordano, who is SCA's president, chief executive officer and a director; and David Shea, SCA's chief financial officer. Defendants in one action only are Goldman Sachs & Co, JP Morgan Securities Inc., and Merrill Lynch, Pierce, Fenner & Smith Inc., which all served as the lead underwriters for the secondary offering.

"The registration statement and prospectus contained untrue statements of material facts, omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation," the first complaint reads.

The plaintiffs claim SCA's documents failed to disclose that "(a) the company was materially exposed to extremely risky structured financial credit derivatives and (b) the company was materially exposed to residential mortgage-backed securities relating to sub-prime real estate mortgages".

In trading yesterday, SCA shares closed on $2.28, up five cents, while XL Capital shares rose $2.60 to finish at $50.10.