Robert Stearns, the first Marsh & McLennan employee to be accused in New York Attorney General Eliot Spitzer's probe of bid-rigging and price-fixing in the insurance industry, pled guilty in New York State Supreme Court Thursday to criminal charges, Bloomberg reports. He faces four years in jail, although that could be lessened in light of his promised cooperation.
Stearns told Justice James Yates that he and other executives at the brokerage unit of MMC "participated in a scheme with individuals at various insurance companies," including ACE and American International Group. He is the sixth insurance executive to plead guilty to criminal charges. Two from AIG, one from ACE and two from the U.S. division of Zurich Financial, made earlier pleas.
Spitzer's office sued MMC in October for conspiring to ensure the renewal of group policies at client companies carrying high fees by obtaining bids from competitors with less favorable coverage. Prosecutors have reportedly obtained copies of e-mails Stearns sent colleagues referring to this practice.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.