A New York court has found two former executives at insurance broker Marsh guilty of monopoly, but acquitted the two of all other charges stemming from a bid-rigging case brought by the state’s attorney general, according to a clerk for the judge involved in the trial.
A clerk for Judge James A. Yates confirmed the ruling in the case against former Executive Marketing Director William Gilman and former Global Placement Director Edward J. McNenney, who were among a group of former executives indicted in a bid-rigging scheme in Sept. 2005 by then-Attorney General and current Gov. Eliot Spitzer.
Gilman and McNenney were acquitted of charges of scheming to defraud and multiple counts of grand larceny.
Spitzer’s office had alleged that the defendants and others conspired with brokers and insurance companies to arrange noncompetitive bids for New York-based Marsh & McLennan’s corporate customers from November 1998 to September 2004.
Those customers were large companies with big potential risks that bought excess casualty insurance for catastrophic situations such as oil spills. Lawyers for the attorney general argued the arrangement cheated customers.
Marsh & McLennan, which itself faced no criminal charges in the case against Gilman and McNenney, in January 2005 paid $850 million to settle allegations that it steered business to insurers who paid the brokerage the highest commissions. The brokerage also agreed to ban so-called “contingent commissions” and set new disclosure rules that would make the company’s fee structure more transparent to customers.
Five other executives still await trial in connection with the attorney general’s investigation.
Jeffrey Lerner, spokesman for Attorney General Andrew C. Cuomo said, “We are gratified that the court found the defendants guilty of felony bid rigging. Bid rigging is a serious offense which deprives customers of the benefits of a competitive marketplace and this office will continue to prosecute it vigorously.”
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