XL Capital Ltd. (NYSE: XL) shares surged higher after Chairman Brian O'Hara involuntarily sold nearly 80% of his common stock on October 9th in order to meet a margin call. This isn't the first time such a disclosure was made either. Earlier this week, Chesapeake Energy CEO Aubrey McClendon sold a half billion of his company's common shares in order to meet a similar margin call. It appears that much of the decline last week may have been due to these margin calls!

"I regret that last Thursday I was forced to sell approximately 80% of my XL shares," said Mr. O'Hara. "I had pledged those shares as collateral to secure a personal loan used to fund purchases of XL shares in order to avoid the expiration of certain options. The forced sale was due to the precipitous drop in XL's share price last week. The sale in no way reflects the lack of confidence in XL's current and future prospects."

Shareholders were happy to hear this as the huge selling last week was not due to a change in company fundamentals. Rather, it was simply an executive that was being forced to sell for no fundamental reason. This led shares to rally over 50% on the day. XL Capital Ltd (XL) is a provider of insurance and reinsurance coverage to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis.