posted $1 million second quarter net income -- down 75 percent on last year.

The company, which provides risk management services and products mostly to US-based small and mid-sized businesses as well as reinsurance through its subsidiaries, has been the target of several lawsuits in recent months.

Stirling Cooke shares, quoted on the NASDAQ, have taken a battering over the past year, not helped by negative publicity emanating from the legal wrangles.

And directors of the company also announced Friday they would pay a third quarter dividend of three cents per ordinary share, payable on September 3 to shareholders of record on August 23.

In the second quarter last year Stirling Cooke posted net income of $4 million, four times more than the $1 million in net income recorded this year.

For the six months ended June 30 this year the company recorded net income of $4.6 million compared to $8 million for the same period last year.

In a statement yesterday the company blamed the disappointing results partly on the costly impact of the legal fights.

"The results were adversely affected by ongoing litigation and advisory costs and provisions of $3.6 million (pre tax) during the second quarter and $4.8 million (pre tax) during the first six months of 1999,'' it said.

"The decrease in net income was also due to a reduction in volume and fee margins from the company's MGA-generated programme business in the US.'' And the company admitted it has "further revised its outlook downward for the remainder of 1999'' because of the spiralling "expenses relating to legal and financial advisory costs'' as well as competitive market forces.

"At this time based on information currently available to management, the company estimates that 1999 reported net income will be in the range of 50 percent below the $16 million achieved'' last year.

The results showed in the second quarter Stirling Cooke's revenues totaled $20.6 million, a decline of seven percent compared to revenues of $22.1 million in 1998's second quarter.

But in the six months till June 30 revenues were $44.2 million, showing an increase of $2.2 million or five percent on the $42 million raked in during the first half of 1998.

Brokerage revenues were also up, increasing $3.5 million to $10 million in the second quarter from $6.5 million in the same period last year.

"This was primarily due to increased insurance and reinsurance brokerage activities by the company's UK based brokerage operations that performed well during the quarter and first half of 1999,'' the company's statement said.