Three Former Marsh Execs Found Not Guilty in Bid Rigging

Three of eight former Marsh Inc. executives indicted about four years ago have been acquitted of criminal charges they were involved in an insurance bid-rigging scheme.

Joseph Peiser, former head of Marsh's global excess casualty unit, and Greg J. Doherty and Kathleen M. Drake, two local brokerage executives, were found not guilty in New York State Supreme Court in Manhattan, confirmed the law firm of Blank Rome in New York, which represented Peiser. The trio was accused of collusion with several large commercial insurers to rig bids for certain excess casualty coverage by intentionally transmitting false or fraudulent quotations to Marsh clients.

The charges stemmed from former New York state Attorney General Eliot Spitzer's investigation of insurance industry practices and a civil suit he filed in 2004 against Marsh and its corporate parent, Marsh & McLennan Cos. (NYSE: MMC). Marsh in January 2005 agreed to settle the civil charges, agreeing to establish an $850 million restitution fund. The settlement included an apology from Marsh but no admission of legal wrongdoing (BestWire, Jan. 31, 2005).

The decision by Judge James A. Yates to acquit Peiser, Doherty and Drake follows the February 2008 conviction of former Marsh executives, William Gilman and Edward J. McNenney, on a charge of restraint of trade. Gilman was the company's executive marketing director and managing director, and McNenney was global placement director and managing director (BestWire, Feb. 25, 2008).

During afternoon trading on Oct. 27, shares of Marsh & McLennan Cos. were selling at $24.89, down about 0.3% from the previous close.