Word: spitzers
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Dates: during 2000-2009
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...Eliot Spitzer received an anonymous letter last March that made for intriguing reading. The message suggested that the New York attorney general poke around Marsh & McLennan, the U.S.'s largest insurance broker and a firm Spitzer had tangled with in earlier financial- industry investigations. This time Spitzer asked Marsh about its practice of receiving "contingent commissions" from insurance companies, a controversial type of payment. That's when things started to get nasty. Spitzer says the more he probed, the more Marsh misled and "fed us the same foolishness they've been feeding the public over the years." He felt that...
Marsh is paying dearly for not playing nice with Spitzer, whose anticorruption crusades in recent years have targeted top executives at Wall Street investment banks, mutual-fund companies, pharmaceutical firms and the New York Stock Exchange (N.Y.S.E.). In a civil suit filed in New York state court last week, Spitzer charged Marsh with a price-fixing and kickback scheme that inflated the cost of insurance for clients ranging from the Greenville County School District in South Carolina to companies like Fortune Brands. According to Spitzer, roughly $800 million of the $1.5 billion in net income Marsh earned last year came...
Marsh, whose stock sank 24% on the news, said it has been cooperating with Spitzer since spring but had not been made aware of the charges until last week, when it agreed to stop taking the payments and replaced the head of the business unit involved in the allegations. In a statement, Marsh said it was "committed to getting all the facts, determining any incidence of improper behavior, and dealing appropriately with any wrongdoing." Separately, the company's independent directors expressed confidence in the firm's leadership. Marsh declined to comment further to TIME. But the attorney general...
...this latest fight, Spitzer is again crusading against the system. Last week's suit outlines Marsh's deals with several big insurers, suggesting that price fixing and kickbacks may be widespread in the industry. "When you corrupt a market as the insurance carriers and brokers have by permitting cartel-like behavior, prices go up," says Spitzer. He has issued dozens of subpoenas targeting companies like Aon, Willis Group Holdings and, as was disclosed last week, MetLife. Two executives at AIG and one from insurance company Ace, which were mentioned in the Marsh suit, pleaded guilty to charges last week...
...Greenberg insurance dynasty will weather Spitzer's latest assault is unclear. Hank and his sons Jeffrey and Evan, CEO of Ace, are widely respected as the first family of insurance. But each now has the rare distinction of heading a firm mentioned in a Spitzer lawsuit. Is Jeffrey really responsible for unethical practices at Marsh? Says Spitzer: "When you have an $800 million stream of income, one has to be either ignorant, lazy or complicit not to examine how this money is being derived." He's clearly ready for another fight. --With reporting by Barbara Kiviat and Jyoti Thottam/New York