Eliot Spitzer is hanging Marsh McLennan
out to dry, but this time it has nothing to do with the fund industry. The NYAG released a statement
on Thursday, alleging the brokerage arm of MMC -- Marsh & McLennan Companies -- sold clients insurance based on incentives from insurance companies.
As for the insurance industry? Spitzer characterized it as a "system that rigs bids, stifles competition and cheats customers."
"Trust me, this is Day One," the WSJ reported
Spitzer saying at a press conference.
The NYAG filed a complaint
in Manhattan federal court alleging that MMC pushed clients towards insurers that it received kickbacks from (sound familiar?)
Spitzer also alleges that MMC requested fake bids from insurers to maintain an illusion of a competitive bidding process.
According to the release, one MMC executive said, "[w]e need to place our business in 2004 with those [insurance companies] that have superior financials, broad coverage and pay us the most."
MMC was quick to respond
, saying that it is cooperating fully with the attorney general's investigations. Putnam stated that Spitzer begun his investigations this past spring.
Spitzer also announced that two AIG executives --
Karen Radke, senior vice president in Excess Casualty, and Jean-Baptist Tataeossian, manager in AIG's National Accounts group, have pleaded guilty in connection with the practices, the WSJ
reported. The two will cooperate and likely testify in future cases, said Spitzer.
, The Hartford
and Munich American Risk Partners
were among the insurers named in the complaint. Spitzer stated that other companies were also under investigation.
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