Two former Marsh & McLennan Cos. executives were found guilty of restraint of trade and acquitted of 20 other charges Friday after the first bid-rigging trial in a New York probe of anti-competitive insurance sales practices.
William Gilman and Edward McNenney were the first of seven former executives at the world’s largest insurance brokerage to face trial for fraud in the investigation. They were accused by the New York attorney general’s office of fixing prices to steer business to insurers that paid their company hidden fees. The remaining five defendants are awaiting trial.
State Supreme Court Justice James Yates, who heard the case in New York without a jury, found the two men guilty of the one count of monopoly or restraint of trade under the state’s antitrust statutes. They face as much as four years in prison when they are sentenced April 30.
“For ultimately all of the counts, the judge saw the undeniable truth,” said Robert Cleary, a lawyer for Gilman, adding he would appeal the lone conviction. “The verdict on that count is fatally flawed.”
Yates didn’t explain his verdict. Twenty-one former employees of Marsh & McLennan, American International Group Inc. and three other companies have pleaded guilty to felonies or misdemeanors since former state Atty. Gen. Eliot Spitzer initiated the inquiry in 2004.
“We are gratified that the court found the defendants guilty of felony bid-rigging,” said Jeffrey Lerner, a spokesman for current New York Atty. Gen. Andrew Cuomo.
New York-based Marsh & McLennan lost almost half its market value and ousted former Chief Executive Jeffrey Greenberg before settling a related civil lawsuit filed by Spitzer in 2005. The brokerage settled for $850 million over accusations that it rigged bids and took kickbacks from insurers.