Marsh & McLennan to pay $435M to settle 2 class action settlements
Associated Press
11/13/09 8:55 AM PST
NEW YORK — Insurance broker Marsh & McLennan Cos. said Friday it will pay $435 million to settle two class-action lawsuits filed in the wake of allegations of bid rigging and price fixing.
The suits were filed on behalf of three retirement plans that experienced steep losses after the charges were made against the company in 2004. The company's stock dropped precipitously after Eliot Spitzer, then New York's attorney general, announced the charges.
Marsh and McLennan said it does not admit to any wrongdoing under the latest settlements.
Under one settlement, March & McLennan will pay $400 million to pension funds in New Jersey and Ohio. About half that will be covered by insurance, and the remainder will be paid for by cash on hand.
The company also settled for $35 million another class-action suit filed on behalf of a Marsh & McLennan retirement fund. Insurance will cover $25 million of the cost.
In 2005, Marsh and McLennan agreed to pay $850 million to end an investigation into charges it took payoffs from insurance companies to steer clients their way. The company also agreed at the time to change its practices and issue a public apology calling its conduct "unlawful" and "shameful."
"After more than five years of litigation, MMC believes these settlements to be in the best interest of the company and its stockholders," the company said in a statement. "While the company continues to deny all of the claims in these lawsuits, the resolution of these matters puts the litigation arising from the events of 2004 largely behind us and reduces the company's ongoing legal costs."
Shares of Marsh & McLennan slipped 13 cents to $23.86 in afternoon trading.
