Marsh & McLennan Cos. said on Tuesday that first-quarter profit fell 70%, after the insurance broker agreed to scrap some fees from insurers, which it was accused of hiding from clients by New York Attorney General Eliot Spitzer last year.
Marsh, which agreed to pay $850 million in January to settle a lawsuit by Spitzer accusing it of rigging bids and fixing prices, and steering business to insurers that paid special fees, said it took a $225 million of pretax charges for restructuring, retaining employees, regulatory and compliance matters, and possible reimbursements related to mutual funds.
The company's revenue slid 12% in investment management to $398 million. Its fund unit Putnam Investments suffered a 12% drop in assets under management, which stood at $199 billion, with half of the decline in the first quarter alone.
The company posted net income of $134 million, or 25 cents a share, compared with $446 million, or 83 cents a share, a year earlier.