Hey pardners why don’t we go help State Farm beat up on Jim Hood. Not!
NEW YORK (Reuters) – Two former executives at Marsh Inc, a unit of Marsh & McLennan Cos Inc (NYSE:MMC), were found guilty on a monopoly charge on Friday for participating in an insurance bid-rigging scheme, court officials said.
William Gilman, a former executive in Marsh Inc’s Global Broking unit, and Edward J. McNenney, a former global placement director, were acquitted of all other charges they faced in the ruling handed down by New York State Supreme Court Judge James Yates.
The ruling was confirmed by clerks for the judge.
“All of the charges that were thrown out sort of gutted (the government’s) case, in my view,” said Stephen Neal, a lawyer for McNenney. “We are going to appeal the conviction on the anti-trust count vigorously.”
“Bill Gilman was really the client’s best friend and the insurance carrier’s worst enemy,” said Gilman’s attorney, Robert Cleary. “We look at this as merely round one.”
The case, first brought in September 2005 by the New York Attorney General’s office, was part of a sweeping investigation of insurance industry practices.
“We are gratified that the court found the defendants guilty of felony bid rigging,” Jeffrey Lerner, the spokesman for Attorney General Andrew Cuomo, said in a statement.
“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.”
Eight former Marsh executives, including Gilman and McNenney, were indicted in September 2005 and their 10-month bench trial was the first trial in the case.
At the time of the indictments, then-Attorney General Elliot Spitzer said that between November 1998 and September 2004, the defendants colluded with executives at ACE USA (NYSE:ACE), American International Group Inc (NYSE:AIG), Liberty International Insurance Co, Zurich American Insurance Co (VTX:ZURN.VX) and others to rig the market for excess casualty insurance.
Gilman and McNenney were acquitted of charges of scheming to defraud and 19 counts of grand larceny.
Marsh, a unit of the world’s largest insurance broker, itself did not face criminal charges. The company agreed to pay $850 million in January 2005 to settle Spitzer’s civil lawsuit accusing it of bid rigging.