Shares of Bermuda-based reinsurer RenaissanceRe Holdings, yesterday plunged $4.25, or nine percent, as investors reacted to news that chief executive James N. Stanard could face a civil enforcement action from the US Securities and Exchange Commission.

The shares closed at $42.98, or 47 cents above the company?s 52-week low, as investors bought and sold a total of 2.6 million shares.

Mr. Stanard, who founded RenRe in 1992, faces the SEC action for alleged violation of federal securities laws stemming from the company?s February restatement of several years of results.

Trading of RenRe shares, which are listed on the New York Stock Exchange, was six times higher yesterday than the average daily activity seen by the company in the last three months.

The company saw a $300,000 decline in its market capitalisation, from the heavy activity, to $3.05 billion.

It was not clear if any large holders of RenRe shares bought or sold, though trading activity showed a few peaks with as many as 200,000 shares trading at one time.

Management and those with close ties to the company hold more than 4 million shares ? about half of that number, 2.56 million shares, are held by Mr. Stanard, according to share data available yesterday.

A significant portion of RenRe shares, about 84 percent, is held by institutions and mutual funds.

Michael W. Cash, a former senior vice-president who was fired from RenRe earlier in the month for refusing a subpoena related to a regulatory investigation of the company, was also sent a notice by the SEC, the company said yesterday.

Mr. Cash?s holding of RenRe shares was reduced by 39,337 on Friday, July 8, in a ?non-open market? transaction, a regulatory filing with the SEC showed.

Mr. Cash had not acquired or sold any RenRe shares for 14 months prior. The following Monday, July 11, the company announced Mr. Cash had been fired. He continues to hold 63,430 shares, worth $2.7 million, at current market price.

RenRe shares hit a 52-week low of $42.51 on May 4, when the company posted first quarter earnings that missed analyst expectations by almost $1 a share, posting net income of 62 cents a share when analysts had expected $1.60 per share in earnings.

RenRe forecasted 2005 earnings of $6.30 to $6.70 a share.

The company is due to release its second quarter earnings result after market close tonight. Analysts who follow RenRe expect quarterly net income of around $2.04 a share, or in the region of $144 million.

In another development yesterday, insurance rating agency Standard & Poor?s said it may cut RenRe?s credit, debt and financial strength ratings because of the ?Wells Notice?received by Mr. Stanard.

RenRe?s ratings were put on CreditWatch negative, indicating a downgrade is possible.

S&P said concerns related to RenRe?s independent board of directors earlier this year reprimanding Mr. Stanard, Mr. Cash, president William I. Riker, chief financial and operating officer John M. Lummis and controller Martin J. Merritt, who has since left the company.

?If senior management instability occurs, or if earnings in 2005 do not meet expectations of a combined ratio of less than 90 percent and an ROE near 15 percent, ratings may be lowered one notch,? S&P said in the statement.