The Chubb Corporation (NYSE: CB) may not sound attractive, but many insiders are a believer in the stock. The firm repurchased some 5.9 million shares during the third quarter and said it would buyback up to 20 million shares over the next year while paying a dividend of 33 cents per share. This is a clear demonstration of financial strength and confidence in the company.

Several other notable hedge funds are also buyers of the stock. Dreman Value Management is well known for its 17% annualized returns and counts the stock among his holdings. Meanwhile, Dodge & Cox is another high profile owner that has posted an annualized return of over 14.5% over the past 10 years. Combined, this is good news for the Chubb Corporation.

During the third quarter, Chubb Corporation reported $264 million in net income compared to $738 million a year earlier. The losses in the third quarter will be about $400 million and come as a result of catastrophes like Hurricane Ike, which included Chubb’s shares in the Texas Windstorm Insurance Association. However, the S&P recently upgraded the stock to A+ while Best affirmed it at A++.

Overall, the Chubb Corporation may be an attractive way to get on the ground floor of this strong stock with other insiders and the company itself!

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The Securities and Exchange Commission (SEC), concerned about its recent bad press, continues to prosecute insider trading through the Christmas season. Last week, the regulatory body charged seven individuals and two companies involved in an insider trading ring.

The SEC alleged that Matthew Devlin, formerly of Lehman Brothers, traded on and tipped his clients and friends with confidential and non-public information about 13 impending corporate transactions. Some of these friends, who worked in the financial or legal professions, also tipped off other clients.

Devlin obtained the privileged information from his wife, a partner in the NYC office of an international public relations firm working on the deals. The illicit trading occurred from at least March 2004 through July 2008, yielding more than $4.8 million in profits. Devlin was also rewarded with cash and luxury items in exchange for the information, including a widescreen TV, leather jacket, and Porsche driving lessons.

The traders attempted to avoid detection by trading in the securities of the target companies in numerous accounts that were not associated with Lehman or Devlin. To further conceal their illicit trading, at least two of the defendants sold off some of the shares they had purchased based on inside information prior to public announcements of the deals. In addition, Devlin and one of his tippees arranged to buy shares on Devlin's behalf so Devlin could profit from the nonpublic information but evade scrutiny.

The companies targeted from this scam included: InVision Technologies, Inc.; Eon Labs, Inc.; Mylan, Inc.; Abgenix, Inc.; Aztar Corporation; Veritas, DGC, Inc.; Mercantile Bankshares Corporation; Alcan, Inc.; Ventana Medical Systems, Inc.; Pharmion Corporation; Take-Two Interactive Software, Inc.; Anheuser-Busch, Inc.; and Rohm and Haas Company.

"The Commission is unwavering in its determination to pursue illegal insider trading by securities professionals, lawyers, and others," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. "Today's enforcement action is another example of the exemplary working relationships among the SEC, criminal authorities, FINRA and other self-regulatory organizations."

Trico Marine Services Inc. (NDAQ: TRMA) directors may be forced to fight for their job after an activist shareholder opposition to the company’s current plans. Kistefos AS, which owns a 22% stake, wrote a letter to the board expressing its disappointment about the extraordinary loss in value since the company emerged from bankruptcy in 2005.

“I write today to express our deep concern about the extraordinary loss in value of the company’s shares and about the current operations, direction, management and governance of the company,” said the hedge fund in a letter. “Nevertheless, we believe that there is significant inherent value in the company and we wish to work with management and the Board of Directors to help restore it.”

Kistefos believes that the first step in unlocking this value is to replace the board of directors with its own slate of directors. The hedge fund noted that it is an experienced long-term investor with a strong track record of value creation through successful investment in turnaround companies. The nominees to the board promise to bring significant and relevant operating experience, a track record of generating attractive returns and delivering value to shareholders.

Kistefos outlined several ways in which it could act to improve the company:

1. The company failed to capitalize on high spot rates for shipping because of its bias towards long-term charters. The board would terminate this line of thinking and act in any way that generates the highest returns for shareholders.
2. Management has failed to oversee construction of new vessels and contracts, which has resulted in substantial unnecessary losses. The board would act to make sure that the company does not make any more mistakes of this nature.
3. The company took on substantial debt to make an acquisition in the subsea segment, which has consistently lost money so far. The board would reduce the amount of debt on the books and instead invest in the company’s own stock through share buybacks.
   

According to the fund, “in summary, while we remain confident that, over the very long-term, the industry will offer the Company opportunities for organic and external growth and increased profitability, the Company faces significant challenges in the near future, including: completing the integration of its two recent major acquisitions and reduction of related indebtedness; initiating the internationalization of the subsea operations; enhancing the quality and reach of its supply vessels operations; and returning to satisfactory profitability, all within the context of a global recession.”

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