Four More Plead Guilty In Spitzer Insurance Probe

CBS Marketwatch
August 4, 2005


Four more people pleaded guilty to criminal charges this week as part of New York Attorney General Eliot Spitzer's investigations into bid rigging in the insurance industry.

Three former Marsh & McLennan brokers and an ex-underwriter from Swiss-based insurer Zurich Financial Services admitted taking part in a scheme to rig bids for excess casualty insurance, a spokesman in Spitzer's office said Thursday.

Spitzer began investigating insurance brokers last year and sued Marsh in October, alleging that the company rigged bids and steered business to favored insurers.

Since the civil complaint was filed, 14 executives have pleaded guilty to criminal charges. Six of those people used to work at Marsh, four came from American International Group , three worked for Zurich and one was with Ace Ltd. .

Shares of Marsh, still struggling to recover from the scandal, were down 2.2% to $27.50 in afternoon trading Thursday. The stock has lost 40% of its value since Spitzer filed the suit.

Regina Hatton, a former broker in the excess casualty division of Marsh's global broking unit, and James Spiegel, who used to be a senior underwriter in the excess casualty unit of Zurich Financial Services , pleaded guilty to a scheme to defraud in the first degree, Spitzer spokesman Brad Maione said.

The crime carries a prison sentence of between 16 months and four years, he added.

Nicole Michaels and Todd Murphy, who were also part of Marsh's global broking unit, pleaded guilty to lesser, misdemeanor charges, Maione said.

Hatton, Michaels and Murphy, along with other Marsh brokers, asked insurers such as Zurich and AIG to submit losing bids to ensure that incumbent carriers retained business, according to complaints Spitzer filed in New York criminal court this week.

Spiegel, who was in a department of Zurich that worked exclusively with the Marsh broking unit, complied with Marsh's requests to provide purposefully losing bids, a Spitzer complaint said this week.

Copyright © 2005 CBS Marketwatch



Click here to return to our homepage