Former RenaissanceRe chief executive officer James Stanard has been fined $100,000 by a New York civil court for his part in an alleged "sham transaction" to smooth company earnings.

Judge Gerard Lynch, of the United States District Court for the Southern District of New York found Mr. Stanard liable for fraud violations, books and records violations, for making false or misleading statements to auditors and for providing false officer certifications under US securities law.

But the attempt by plaintiff the US Securities and Exchange Commission to bar Mr. Stanard from serving as an officer or director of a public company was denied by the judge.

The SEC brought the case against Mr. Stanard, along with RenRe's former controller Martin Merritt, and a former senior vice-president of RenRe's principal reinsurance subsidiary, Bermudian Michael Cash, in September 2006.

The three executives were accused of abusing reinsurance accounting to defer more than $26 million of earnings from 2001 to later years.

Mr. Merritt agreed to co-operate with the SEC in a partial settlement, while Mr. Cash settled with the SEC in November 2007 and was fined $130,000. Mr. Stanard, who founded RenRe in 1993 and resigned as CEO in 2005, has always denied wrongdoing.

The SEC alleges that under the "sham" transaction - allegedly known internally at RenaissanceRe as "Project Christmas Present" - RenaissanceRe negotiated a financial insurance contract with Bermuda reinsurer Inter-Ocean Re in which it placed income from a strong financial period to be used later to boost earnings or to cover larger than expected claims.

The SEC also claimed that the executives misled the company's auditors about the nature of the contract, which should have been treated as a loan, and not an expense.

RenRe paid the SEC $15 million to settle the investigation into the case in February 2007. The company neither admitted, nor denied wrongdoing.

In his judgment, delivered on Tuesday, Judge Lynch found that Mr. Stanard made no personal gain from the transactions. However, the judge said the former CEO's violations involved "fraud and the deliberate or reckless disregard of a regulatory equipment".

"Stanard's actions were knowing and he has failed to express remorse or recognition of the wrongfulness of his actions," Judge Lynch wrote. "His violations must therefore be accounted serious."

However, Judge Lynch noted that a substantial risk of loss to others had not been shown. "Moreover, the evidence in this case shows that Stanard gained nothing; his compensation was unaffected by the accounting misstatement at issue," Judge Lynch wrote.

"While there were technically multiple violations of various provisions of the securities laws, all of them resulted from a single scheme. Accordingly, the Court concludes that a total penalty of $100,000 is appropriately imposed for defendant's violations. In view of defendant's substantial wealth, there is no reason to reduce the penalty that is otherwise appropriate."

In January 2007, Mr. Stanard filed a motion to have the SEC's complaint thrown out, in which he argued: "According to the complaint, in early 2001 Mr. Stanard and other defendants - as well as other RenRe officials not named as defendants - searched for a transaction that would permit RenRe 'to defer approximately $26 million of income to protect itself from future insurance losses'.

"Of course, 'putting away' income to protect against future insurance losses is the essence of reinsurance; according to the SEC, however, in this case doing so somehow amounted to fraud."

RenRe restated its earnings in February 2005 to correct accounting on reinsurance contracts the company bought to limit losses. The SEC's investigation of the company was part of a wider probe into finite insurance, sometimes used by companies to smooth earnings from a good year to a leaner time.