THE DIRTY POOP ON...
AON
Sightings from The Catbird Seat
~ o ~
May 2, 2009
Fraud and white-collar crime:
No place to hide
Author: Alistair Graham
UK and international authorities are gearing up for a fight against a potential rise in white-collar crime as the global economy continues to struggle under the downturn. Alistair Graham and James Woolrich report
One of the key questions vexing the legal profession at present is just how the current downturn may impact on the incidence of white-collar crime.
Some think that price fixing will increase during times of financial squeezing as businesses seek ways to ensure returns and stay afloat. At the same time, it is thought that the higher stakes involved in winning contracts may encourage other extreme tactics, such a bribery, to ensure success.
The commission of such practices may also be assisted by a lack of will or resources to detect them when companies are more concerned with keeping their businesses viable than spending time and energy on rigorous anti-corruption systems and controls.
On the other hand, some may argue that white-collar crime is easier to commit and therefore more prevalent in boom times than in a bust: during the good times, there are more opportunities for ‘pick pockets’ with less of a chance to be found out, while the reverse is true when times are bad.
We can be confident that the discovery rate of white-collar crime will increase during a downturn in the economy. There are two main reasons for this. Firstly, as was recently seen with the Madoff case, in a strong economy more people may be taken in by get-rich-quick schemes. However, when the financial climate deteriorates and too many investors ask for their money back, as with Madoff, the scheme unravelled since the money was not actually there – older investors were paid with monies from newer ones. Secondly, the current economic slowdown has coincided with an increase in both the powers of UK regulators and statutory bodies to punish white-collar criminals, and their appetite to do so.
The FSA
Margaret Cole, director of enforcement at the Financial Services Authority (FSA), has emphasised that “credible deterrence” lies at the heart of the FSA’s new approach to regulating the financial services market. In short this means the FSA must show that it is willing and able to process enough cases of the right kind to get the right outcome so that firms, companies and individuals fully understand the consequences they could suffer if they fail to improve standards of behaviour.
In that respect, the FSA has started 2009 with a bang: on 8 January, it published the final notice it had issued to Aon, fining it £5.25m for breach of principle three of the FSA’s Principles for Business.
The FSA had found that Aon failed properly to analyse risks associated with making payments to non FSA-authorised overseas firms and individuals who helped it win business from overseas clients. Aon also failed to implement effective controls to mitigate those risks. The resulting danger that Aon could become involved in potentially corrupt payments to win or retain business, combined with the prominence of Aon in the insurance and reinsurance market (including the fact that Aon’s practices set an example seen by other market practitioners) emphasised the seriousness of the breach.
A correspondingly weighty fine – discounted by 30% because Aon settled at an early stage of the FSA investigation – was levied.
It is noteworthy that the FSA has advised that the “proactive determination” of Aon’s senior management to identify past problems and to improve the firm’s systems and controls in this area was “a model of best practice that other firms may wish to adopt”.
To complement the FSA’s appetite for pursuing and punishing wrong-doers in the regulated sector, the Government has proposed that the FSA be granted new statutory powers, including the power to grant immunity to witnesses when investigating criminal cases like insider trading. Under the new proposals the FSA would be afforded the status of ‘specified prosecutor’ under the Serious Organised Crime and Police Act 2005 (SOCPA) and would be able to issue an immunity notice to an individual, subject to satisfying the requirements of that act.
White-collar crime affects regulated and non-regulated businesses alike. On the non-regulated side of the fence, the proposed reform to the law of bribery and the Serious Fraud Office’s (SFO’s) commitment to increase investigations into corruption, as well as the US’s continued scrutiny of UK businesses, are gaining more attention as market volatility continues.
Reform of bribery
Despite its ancient roots (the Magna Carta declares that ‘justice or right’ would be sold to no man), the current law on bribery in England and Wales is not held in high esteem internationally and has been heavily criticised by the Organisation for Economic Co-operation and Development for having little impact in policing bribery and corruption.
However, this is set to change. In its final report, published on 20 November, 2008, the Law Commission proposed to repeal the common law offence of bribery and many of the statutory provisions relating to bribery. In their place will stand two general offences concerned with the conduct of the payer or giver of an advantage to induce someone to behave improperly; and the conduct of the recipient who requests or accepts such an advantage either in exchange for acting improperly, or where the request/acceptance is itself improper.
There will also be a specific offence relating to bribing a foreign public official (FPO) where the intention is to influence that official in his or her capacity as an FPO in the obtaining or retaining of business advantages. Finally, there will be a new corporate offence of negligently failing to prevent bribes being given or offered on behalf of a company or limited liability partnership registered in England and Wales.
Directors or equivalent officers of a company that contravenes any of these three offences may find themselves held criminally liable as individuals. These new offences will apply to conduct anywhere in the world by a UK national, resident or company and will attract a maximum sentence of 10 years’ imprisonment for individuals and an unlimited fine for companies.
While it will be a defence for the organisation to show that there were adequate procedures in place designed to prevent employees or agents committing bribery, this defence will not apply if the person responsible for preventing the bribery was a director, manager or equivalent person within the organisation. All of this indicates that the Law Commission’s key concern is with organisations that do not put systems in place to ensure active bribery is not committed on their behalf.
Resolving an effective and fair modern law of bribery is an extremely challenging task, both technically and politically. It is not easy to capture the balance between avoiding formulating laws that impinge on local mores concerning acceptable profit taking and creating an anti-bribery regime that can combat overseas bribery. However, the Law Commission’s final report represents a significant step in simplifying and solidifying the current law.
The US
That is not to say, however, that the US is likely to relax its scrutiny of UK business in this area. The Foreign Corrupt Practices Act (FCPA) gives US prosecutors very strong powers to pursue foreign nationals and impose large fines and custodial sentences. The Department of Justice brought more prosecutions under the FCPA in the last two years than in the preceding 20 years. Many of the cases resulted in severe penalties: 80% of individuals sentenced for FCPA violations receive jail sentences.
The Securities and Exchange Commission has also increased the number of probes it carries out. UK businesses must therefore be aware of their potential exposure to the long arm of the US law and, where necessary, seek advice from lawyers who understand both the US and UK regulatory approaches.
The UK
The action has been mirrored in the UK, where the SFO’s director, Richard Alderman, recently announced that the SFO will allocate more resources to combat overseas corruption, increasing the number of investigators it has on anti-corruption work from 65 to 100. This verbal commitment to combating fraud has quickly been followed by action: on 9 January, 2009 the SFO launched a formal investigation into London-based Madoff Securities International – the results of which are awaited with interest.
The combination of the current economic downturn and the increase in the power and appetite of the regulatory and prosecuting authorities to pursue white-collar criminals will ensure that white-collar crime is high on the agenda in 2009. International commerce may well be “red in tooth and claw” as Sir Christopher Staughton put it, perhaps especially so in tough times, but it is clear that the rules of the game must still be complied with. Those that break them or allow them to be broken by others in their organisations will face tough penalties.
Alistair Graham is head of the London commercial litigation practice and James Woolrich a commercial litigation associate at White & Case.
May 19, 2009
RE: CV05-00030 - U.S. Dept of Justice, David C. Farmer, Trustee vs. Bobby N. Harmon - New Exhibit: "Marsh & McLennan & AON have participated for decades in fraud and bid rigging..."
From:
Bobby N. Harmon, CPCU
To:
"President Barack Obama" <president@whitehouse.gov>, "U.S. Attorney General Eric Holder" <AskDOJ@usdoj.gov>, "David Farmer" <farmerd001@hawaii.rr.com>, "Steven Guttman" <sguttman@kdubm.com>, "Carol K. Muranaka" <ustp.region15@usdoj.gov>, "Judge David A. Ezra" <theresa_lam@hid.uscourts.gov>, "Judge Kevin S.C. Chang" <shari_afuso@hid.uscourts.gov>, "Judge Barry M. Kurren" <tammy_kimura@hid.uscourts.gov>, "Securities & Exchange Commission Enforcement Division" <enforcement@sec.gov>, "U.S. Treasury Dept. Office of Inspector General" <hotline@oig.treas.gov>, "Office of Inspector General US Dept of Justice" <oig.hotline@usdoj.gov>, "Executive Office for U.S. Trustees" <ustrustee.program@usdoj.gov>, "Judge Robert Faris" <hib@hib.uscourts.gov>, "SEC Office of The Inspector General" <oig@sec.gov>, "Hawaii State Bar Association" <info@hsba.org>, "Charles Goodwin" <HONOLULU@FBI.GOV>, "Hugh Jones" <hugh.r.jones@hawaii.gov>, "Insurance Division Fraud Branch" <insfraud@dcca.hawaii.gov>, "Lawrence Reifurth" <dcca@dcca.hawaii.gov>, "Linda Lingle" <governor.lingle@hawaii.gov>, "Jo Ann Uchida" <rico@dcca.hawaii.gov>
Cc:
"ACLU Hawaii" <office@acluhawaii.org>, "All Representatives" <reps@Capitol.hawaii.gov>, "All Senators" <sens@Capitol.hawaii.gov>, "Andrew Walden" <hfpeditor@email.com>, "Aon Insurance Managers" <mike_coulter@agl.aon.com>, "Arthur Rath" <imua@spamarrest.com>, "Benjamin Kudo" <bkudo@imanakakudo.com>, "Bradley Tamm" <btamm@hawaii.rr.com>, "Carl Morton" <ethics@hawaiiethics.org>, "Charles Hurd" <mcp@mediatehawaii.org>, "David Shapiro" <volcanicash@gmail.com>, "Dee Jay Mailer" <ksinfo@ksbe.edu>, "J C Shannon" <Hapa1234@aol.com>, "James B Nicholson" <jamesbnicholson@aol.com>, "James B. Farris" <Farrisj@adr.org>, "James Cribley" <jcribley@caselombardi.com>, "James Wriston" <jwriston@awlaw.com>, "Jeffrey Watanabe" <jwatanabe@wik.com>, "Jim Dooley" <jdooley@honoluluadvertiser.com>, "Joe Moore" <news@khon2.com>, "John D. Finnegan" <info@chubb.com>, "John Goemans" <wip@kamuela.com>, "Judson Witham" <jurisnot2@yahoo.com>, "Ken Conklin" <ken_conklin@yahoo.com>, "Lyn Flanigan Anzai" <lflanigan@hsba.org>, "Margery Bronster" <info@bchlaw.net>, "Marsh Affinity Group" <prosecure@marshpm.com>, "Michael N. Tanoue" <mtanoue@paclawgroup.com>, "Michelle Tucker" <michelle@sterlingandtucker.com>, "Nathan Aipa" <nathan@pitluck.com>, "Paul Alston" <palston@ahfi.com>, "Randall Roth" <rroth@hawaii.edu>, "Rick Daysog" <rdaysog@honoluluadvertiser.com>, "Robert Bruce Graham" <bgraham@awlaw.com>, "Robin Campaniano" <aigh001@aighawaii.com>, "Samuel P. King" <leslie_sai@hid.uscourts.gov>, "William K Slate" <Websitemail@adr.org>, "Jim Terrack" <tnthawaii@aol.com>, "Don Michak" <dmichak@journalinquirer.com>, "Rocco Sansone" <rocco.c.sansone@marsh.com>, "Ted Pettit" <tpettit@caselombardi.com>, "Laura Thielen" <dlnr@hawaii.gov>, "Vaughn & Lynda Robinson" <ronpaulslcutah@yahoo.com>, "Rebecca Christie" <rchristie4@bloomberg.net>, "Catbird" <the-catbird@hotmail.com>, "James Duca" <jduca@kdubm.com>, "Ian Lind" <diary@ilind.net>, "Roy F. Hughes" <hthughes@hawaii.rr.com>, "Malia Zimmerman" <Malia@hawaiireporter.com>, "Jack Cashill" <JCashill@aol.com>, "Marshall Chriswell" <mc@whistleblowers.org>, "Laser Haas" <laserhaas@msn.com>, "Lucy Komisar" <lkomisar@msn.com>, "Democrats.com" <activist@democrats.com>, "Debra Sweet" <debrasweet@worldcantwait.org>, "Jane Kirtley" <kirt001@umn.edu>, "V K Durham" <vkdtdht@pionet.net>, "John Jubinsky" <Jube@tghawaii.com>, "Yamil Berard" <yberard@star-telegram.com>, "Global Exchange" <communications@globalexchange.org>, "William K. Black" <blackw@umkc.edu>, "Carole Williams" <cjwms@up.net>, "Susan Tius" <STius@rmhawaii.com>, "Human Rights in China" <hrichina@hrichina.org>, "Michelle Malkin" <writemalkin@gmail.com>, "Heather Vsn Doren" <heather.vandoran@yahoo.com>, "Phil J. Berg" <philjberg@obamacrimes.com>, "Amnesty International U.S.A." <aimember@aiusa.org>, "Michael Moore" <bailout@michaelmoore.com>, "California Anti-SLAPP Project" <info@casp.net>, "Thomas Fitton" <info@judicialwatch.org>, "Ron Branson" <VictoryUSA@jail4judges.org>
California Insurance Fraud Attorneys
The Law Offices of Nadrich & Cohen, LLP, a successful and aggressive California and nationwide law firm is seeking appropriate companies and/or individuals who have utilized Marsh & McLennan or AON as their insurance brokers for placement of insurance policies. Marsh & McLennan & AON have participated for decades in fraud and bid rigging by placing its clients' insurance with certain carriers solely to obtain additional commissions undisclosed to their clients. What Marsh & McLennan and AON clients did not know was that a secret commission was paid to Marsh & McLennan or AON for their insurance placement in addition to the disclosed brokerage fee.
Unlike markets for securities, commodities, and other financial products, commercial insurance is bought and sold in private. Insurance brokers such as Marsh & McLennan & AON are no more than middle-men who match up buyers and sellers in return for a cut of the transaction. Marsh & McLennan is the leader in selling property casualty coverage to businesses around the world. Industry wide, premiums paid last year just in the United States totaled $176 billion.
The bid-rigging scheme worked as follows: Marsh & McLennan or AON steered business toward certain insurance companies at designated prices. They then would solicit additional artificial higher fake bids from other companies to give the appearance to the client of real bidding. Marsh & McLennan did this even as it claimed in public statements that its "guiding principles" was to consider its clients' best interests "first and foremost."
By this activity, Marsh clearly did not consider its client's best interest "first and foremost."
The kick-back scheme worked as follows: Insurance brokers such as Marsh & McLennan & AON received directly from insurance companies additional secret commissions over and above their ordinary commissions. These commissions were paid for steering volume business to a particular company's way. Insurance companies called these fees "contingent commissions" or "market service agreements". The client never knew.
Critics call these commissions for what they are:
"undisclosed kickbacks."
These improper fee arrangements date back for decades. Many insurance industry executives say it was known to select insiders that these arrangements were in place in order to boost insurance brokers' revenue.
However, these payments were never disclosed to the insured/client to which the brokers owed a fiduciary duty to. Critics and New York Attorney General Eliot Spitzer maintain these practices are poorly disclosed and are a conflict of interest for brokers ostensibly acting on a policy holder's behalf.
Attorney General Spitzer has obtained documentation of employees of AIG who supplied fake quotes to provide the illusion of competitive bidding for Marsh & McLennan clients knowing; at all times, that another insurance company would nonetheless win the bid. Attorney General Spitzer's investigation includes AIG Insurance Company, Bermuda based Ace Insurance Company, Hartford Insurance Company and others.
Marsh & McLennan received $800 million in revenue from contingent commissions in 2003 - the equivalent of more than half of its $1.5 billion income.
Marsh & McLennan cheated its own corporate clients by rigging bids and wrongfully collecting huge fees from insurance companys for throwing business their way. They purposefully did not disclose these fees to their clients. If this occurred to you and/or your company, please immediately contact our experienced insurance class action law firm as we are vigorously investigating a class action against Marsh & McLennan and AON.
The effect of contingent commissions are that they wrongfully reward brokers for hitting profit or volume targets and thus provide brokers a financial incentive to choose one company over another, even if the other company offered a better price or better terms.
Nadrich & Cohen, LLP and co-counsel are actively interviewing Marsh and AON's clients for purposes of bringing a civil lawsuit against Marsh & McLennan and/or AON. The lawsuit's basis will be that the incentive fees or contingent commissions or placement service agreements paid in exchange for sending more business to an insurance company's way were in reality, wrongful commissions which defrauded the policy holder by not intentionally providing the policy holder with the best deal possible. The cost of insurance was also artificially raised, forcing buyers to pay higher premiums, thus further cheating buyers.
The lawsuit will seek to have contingent commissions declared illegal, recover damages for Marsh customers and forces Marsh & McLennan to give up illegal profits.
Nadrich & Cohen, LLP and its co-counsel are pursuing a separate class action to demand reimbursement to Marsh & McLennan stock investors because Marsh's wrongful actions devalued the price of the stock.
The Law Offices of Nadrich & Cohen, LLP is seeking clients of Marsh & McLennan who were victims of the undisclosed contingent commission bid-rigging and other anti-competitive activities. We strongly believe Marsh's actions harmed its clients by keeping their insurance prices artificially inflated.
Our law firm is an experienced and aggressive insurance fraud law firm actively seeking policy holders who purchased insurance through Marsh & McLennan or AON, Inc.
Companies that we know who are involved in the bid-rigging process included AIG or American International Group, Hartford Fire Insurance Company, Chubb Indemnity Corp., and other insurances.
If you or your business purchased insurance through Marsh & McLennan of AON, please contact us immediately. Nadrich & Cohen, LLP works on a contingent fee basis only. We are paid a fee only if we obtain a recovery. If we do not obtain a recovery our clients owe us nothing for our services.
http://www.insurance-broker-fraud.com/
* * * * *
May 19, 2009
Dear President Obama, Attorney General Holder, Trustee Farmer, Mr. Guttman, and All Concerned:
Due to the discovery of new facts, I am adding the subject Exhibit as it relates to this lawsuit which violates my Constitutional Rights of Free Speech and a Fair Trial, and Federal and Hawaii Anti-SLAPP statutes. You will find related information on-line at:
http://www.kycbs.net/Allied-World-Assurance.htm
http://www.kycbs.net/Bad-Faith-Buzzards.htm
http://www.kycbs.net/Broken-Trust-Book.htm
http://www.kycbs.net/ChubbGroup.htm
http://www.kycbs.net/Confessions.htm
http://www.kycbs.net/Freedom-To-Sing.htm
http://www.kycbs.net/Hartford.htm
http://www.kycbs.net/Insurance-Vampires.htm
http://www.kycbs.net/JUSTICE.htm
http://www.kycbs.net/MarshBirds.htm
http://www.kycbs.net/Mid-Ocean.htm
http://www.kycbs.net/RICO-BH.htm
http://www.kycbs.net/Vesta.htm
http://www.kycbs.net/Zurich.htm
In view of all the facts that I have presented in this and hundreds of other Exhibits and witness descriptions, it is beyond comprehension that former Attorney General Alberto Gonzales; Assistant U.S. Trustees Curtis Ching, Gayle Lau and Carol Muranaka; Judges Eden Hifo (fka Bambi Weil), Kevin Chang, David Ezra, Barry Kurren, Lloyd King and Robert Faris; Trustees Mary Lou Woo, James Nicholson and David C. Farmer; American Arbitration Association arbitrator Judith Neustadter Fuqua, attorney Steven Guttman, and others, can still claim that they were non-conflicted, fair, impartial, and unbiased in this case.
Mr. Farmer and Mr. Guttman, in spite of all this factual evidence (not just "political opinions" or "conspiracy theories" as you have previously alleged), I am again asking that we attempt to reach a global settlement of this matter through confidential negotiation or mediation rather than continuing these costly and seemingly-endless court proceedings.
However, if you, and your insurance carriers, are still not willing to attempt to negotiate or mediate a settlement, then I ask that you perform your mandated review of this new Exhibit in accordance with Judge Ezra's Order, and advise me if you find it contains any so-called "protected subject matter", and whether or not you intend to OBJECT to my filing a Motion to reopen this case.
I respectfully request your immediate reply. If I do not receive a response from you or your insurance carrier within 15 days, I will assume that you have found no "PSM" in these updated pages, and that you will NOT file any objections to my Motion.
Very truly yours,
Bobby N. Harmon, CPCU, ARM
Additional References:
http://whistlersongs.blogspot.com
January 25, 2008
Aon Responds To Societe Generale Incident
by Stewart Douglas
Insurer Aon has today released a statement in response to the high profile Societe Generale fraud case in which a rogue trader managed to amass some $7 billion of loss undetected by his employers, casting further doubt over the health of the banking industry, and the long term projections for Societe Generale.
Having traded under the radar for some time, an employee at the Paris based investment firm was today uncovered as having traded fraudulently under the banner of the bank, which led to substantial losses, several subsequent dismissals and extreme public embarrassment and media scrutiny for the troubled bank.
The problem has come at one of the worst times for the banking industry in recent memory, after the credit crunch and world economic slowdown has resulted in weak trading conditions for investment firms and elevated risks for largescale investment banks.
“Employee fraud, and in particular unauthorised trading, is insurable but the challenge has been persuading some banks to admit such exposure exists. The SocGen incident proves internal fraud has the potential to threaten the capital base of even the largest banks,” said Daniel Butler of the financial institutions team at Aon.
“It is not only the magnitude that is shocking but the fact that it happened at head office. Similar cases have tended to occur in far away subsidiaries and not under the noses of senior management.”
Whilst the losses have undoubtedly damaged the reputation of the bank, it is thought that the move will encourage more investment banks to take insurance against employee fraud and misdemeanour with a view to protecting against future calamities of this nature.
October 12, 2007
Aon Corp. CFO to Get
at Least $1M Bonus
Forbes
WASHINGTON - Aon Corp. departing Chief Financial Officer David P. Bolger will get a 2007 bonus of at least $1 million, according to a Securities and Exchange Commission filing Friday.
Bolger is leaving because he was named chief operations officer of Chicago 2016, Chicago's Olympic bid committee.
The insurance consulting and brokerage company has said Christa Davies, its new executive vice president of global finance, will replace Bolger as chief financial officer, effective March 1.
The Chicago-based company paid Bolger compensation valued at $3.5 million for the fiscal year ended Dec. 31, 2006, including a $750,000 salary, stock awards valued at $1.2 million, and $1.1 million in non-equity incentive plan compensation.
April 4, 2005
Aon names Gregory Case CEO
USA Today
CHICAGO (AP) — Aon (AOC), the nation's No. 2 insurance brokerage, said Monday it has named consultant Gregory Case as its president and chief executive — more than six months after Patrick Ryan disclosed his intent to leave.
Case, 42, most recently served as head of the financial services practice at the management consulting firm McKinsey & Co. and previously was responsible for McKinsey's global insurance practice. He also was elected to Aon's board of directors.
Ryan, who has been CEO of Aon and its predecessor for more than 40 years, will stay on as executive board chairman.
Monday's announcement came one month after Aon agreed to pay $190 million to settle an investigation by the attorneys general in New York, Illinois and Connecticut into anti-competitive business practices. The authorities concluded that Aon had steered clients' insurance premiums to insurers who agreed to use Aon's separate reinsurance brokerage to obtain insurance for themselves.
Ryan issued an apology as part of the settlement.
The CEO search was delayed while the company negotiated with New York Attorney General Eliot Spitzer over the final terms of the settlement.
Andrew McKenna, lead Aon director and chairman of the board's search committee, said Case is well-suited to lead Aon at a time when the insurance industry is changing rapidly.
March 4, 2005
Aon Settles Corruption Probe with
3 States for $190 Million
Complaint Cites Involvement of Top Execs
New York Attorney General Eliot Spitzer and Acting New York State Insurance Superintendent Howard Mills, together with Connecticut Attorney General Richard Blumenthal, Illinois Attorney General Lisa Madigan and Illinois Acting Director of Insurance Deirdre Manna, today announced an agreement with the nation’s second largest insurance brokerage to resolve allegations of fraud and anti-competitive practices.
Under the agreement, the Chicago-based Aon Corporation is providing $190 million over a 30-month period for restitution to policyholders and is adopting a new business model designed to avoid conflicts of interest. In addition, Aon’s Chairman and CEO, Patrick G. Ryan, will issue a public statement apologizing for Aon’s improper conduct according to the statement issued by Spitzer’s office.
“The underlying complaint in this case shows that improper conduct was pervasive at Aon,” Spitzer said. “To its credit, however, the company has acknowledged the problems, has agreed to compensate policyholders and has adopted reforms that will provide greater accountability in the future.”...
The agreement with Aon was modeled after an earlier agreement reached January 31 with the nation’s largest insurance broker, Marsh & McLennan Companies, for $850 million.
The Aon complaint cites the involvement of Ryan in efforts to increase placements with an insurance company in exchange for that company’s use of an Aon subsidiary (Aon Re) for reinsurance brokering.
The complaint also alleges that Michael O’Halleran, Ryan’s second-in-command, personally negotiated “clawback” arrangements in which Aon Re would provide insurers with discounts or rebates on its reinsurance commissions on the condition that Aon could recover or “claw back” these discounts through retail placements made with the same insurers....
The civil complaint filed today in State Supreme Court in Manhattan and the citation issued by the New York Insurance Department allege that for years Aon received special payments from insurance companies that were above and beyond normal sales commissions. These payments – known as “contingent commissions” – were characterized as compensation for “services to underwriters” but were, in fact, rewards for the business that Aon steered and allocated to the insurance companies.
Spitzer’s office and the Insurance Department have said they have uncovered evidence showing that the “practice distorts and corrupts the insurance marketplace and cheats insurance customers.”...
Spitzer’s complaint against the company cites internal communications in which top executives openly discussed these efforts to maximize Aon’s revenue and insurance companies’ revenues - without regard to Aon’s clients’ interests....
Spitzer’s office and the New York State Department of Insurance said they are continuing a broad investigation of the insurance industry. To date, 10 executives from four companies have pleaded guilty to criminal charges stemming from the probe.
October 26, 2004
Aon Mired in Marsh
By Rich Duprey, The Motley Fool
As Marsh & McLennan (NYSE: MMC) struggles to stay afloat in a quagmire of alleged bid-rigging and price-fixing, another industry giant, Aon Corp. (NYSE: AOC), has suddenly found itself flailing about for buoyancy as well.
New York State Attorney General Eliot Spitzer has allegedly found proof that the world's second-largest insurance broker was steering business to insurers that paid incentives to the company, a possible violation of the state's fraud and antitrust laws, as well as evidence of the practice of "tying," whereby the broker threatens to stop recommending an insurer's policies unless it agrees to use the broker to place its own reinsurance policies.
The alleged sins of Marsh & McLennan are overt criminal acts; the practices of Aon are more nebulous. The impact on the industry is far-reaching.
Spitzer forced Marsh to press the ouster of its CEO by refusing to negotiate with the company and threatening to indict it criminally, an action the company would have been hard-pressed to survive. With little choice, Marsh CEO Jeffrey Greenberg resigned and was replaced by Michael Cherkasky, the former CEO of Kroll Inc., a company Marsh acquired only this year.
Coincidentally -- or not -- Cherkasky was once Spitzer's boss in the district attorney's office. The show of force used by Spitzer to change not only business practices but also corporate leadership has many concerned that the tactics are overreaching, that there is a lack of due process where Spitzer serves as judge, jury, and executioner.
Executives from American International Group (NYSE: AIG) and ACE Ltd. (NYSE: ACE), companies run by Greenberg's father and brother, respectively, apparently pointed to business practices at Marsh when they came under Spitzer's scrutiny, which ultimately led to Greenberg's downfall.
Aon and Marsh control 70% of the insurance company market.
The investigation is widening throughout the industry, as insurers seemingly report daily they have received subpoenas for documents on how business is conducted between brokers and insurers. St. Paul Travelers (NYSE: STA) is the latest of more than two dozen who have received such subpoenas from Spitzer.
Some consumer advocates view Spitzer's crusade as beneficial, possibly leading to lower insurance premiums. Even if no widespread collusion or price fixing is uncovered, companies might reduce premiums simply to avoid the taint of being associated with scandal. Marsh, Aon, and Willis Group Holdings (NYSE: WSH) have already said they will stop charging the miscreant contingency fees, which cost carriers billions of dollars each year.
While that appears good on the surface, premium growth in the commercial insurance industry was already slowing, meaning policies were being renewed at lower rates as it was. Moreover, some insurers like St. Paul's are expecting huge hits to third-quarter profits from the back-to-back-to-back-to-back hurricanes that have hit the Southeast in recent months.
The investigation into insurance industry practices has grown beyond the New York attorney general. Other states, including Minnesota, Connecticut, and California, have also launched investigations, while federal authorities and the SEC push their own probes.
It is a morass that may cause Aon investors to be off with their money to safer investments....
~ o ~
(Catbird Note: For an earlier case of alleged corruption, collusion, racketeering, bid rigging and price fixing involving Aon, Marsh & McLennan, The Chubb Group, XL Insurance, and other birds of a feather, GO TO > > > Harmon’s Claim Letter to John Sinnott; Harmon’s Letters to Insurance Commissioners; RICO in Paradise; Claims By Harmon)
November 4, 2004
Spitzer suit vs. Aon likely, analysts say
by Alistair Barr, CBS MarketWatch
Aon will likely become the second insurance broker to be sued by New York Attorney General Eliot Spitzer, analysts said Thursday.
Aon shares have lagged a slight recovery by Marsh & McLennan in recent days, amid concern that the second-largest insurance broker will face the same bid-rigging and steering charges as its larger rival, or entirely new allegations relating to so-called tying.
Tying occurs when brokers direct the business of their corporate clients to insurance companies in return for those insurers using the broker for their own reinsurance packages.
Axis Capital, a Bermuda-based reinsurer, said late Wednesday that it got a new subpoena from Spitzer on Oct. 21 as part of an industry-wide investigation into tying.
“Aon is the No. 2, so if Spitzer is going to move on from Marsh they are the obvious next target,” said Adam Klauber, an analyst at Cochran, Caronia & Co....
“Since retail insurance brokers have consistently used tying as a method of developing reinsurance brokerage revenues, investigators are going to find evidence of this with Aon,” said Andy Barile, an industry consultant who founded his own reinsurance broker in 1977...
On a Friday conference call, Patrick Ryan, Aon’s chairman and chief executive, refused to comment when an analyst asked him whether Aon engaged in tying.
Leading brokers, such as Marsh & McLennan and Aon, also generate revenue from insurers that they helped start and own stakes in, Barile said. “When they started Bermuda reinsurance companies, they would be the reinsurance broker for that firm as well.”
Aon was one of the leading investors in Endurance Specialty Holdings, a Bermuda-based reinsurer set up after the Sept. 11, 2001 terrorists attacks, and also acted as its main reinsurance broker, according to an Endurance filing with the Securities and Exchange Commission in 2002.
“It is possible that certain brokers and intermediaries that compete with Aon will perceive a conflict of interest in our relationships with Aon,” Endurance said in the filing.
Marsh had a similar relationship with Axis, which it invested in via its MMC Capital private equity unit.
Axis used Marsh and Guy Carpenter & Co., Marsh’s reinsurance unit, for 38 percent of its gross written premiums in 2002, according to an Axis filing with the Securities and Exchange Commission.
November 6, 2004
Florida AG Launches Widespread
Anti-Trust Probe,
10 Subpoenas Issued
By Dave Kaiser, Insurance Journal
Florida Attorney General Charlie Crist has issued subpoenas seeking documents and records from 10 firms and anticipates sending six more subpoenas out next week as insurance industry investigations widen.
Crist is investigating arrangements between insurers and brokers commercial group accounts for property and casualty insurance, life and health policies. The investigation stems from a complaint from a Florida resident.
The 10 firms receiving subpoenas are AON, Inc., The Willis Group, Inc., Brown & Brown, Inc., Arthur J. Gallagher & Company, Acordia, Inc. doing business a Acordia Southeast, Inc., Heath Lambert Group doing business as Heath Lambert Maimi, LLC, Hilb Rogal & Hobbs of Vero Beach, Inc, USI Holdings Corp doing business as USI Insurance Services of Florida, Inc, HUB Investment Corporation and Marsh & McLennan Companies.
Additional firms, which could soon receive subpoenas include ACE Ltd., American International Group, Inc. (AIG), Chubb Corporation, The Hartford Financial Services Group, Inc., Munich American Reinsurance Co., and Zurich American Insurance Company....
“At this point we are investigating the brokers and insurance companies for possible violations of anti-competitive activities,” said Crist. “The subpoenas are part of a larger effort to ascertain whether insurance practices are being conducted lawfully, with no conflict, with insured citizens’ best interest at the forefront.”...
Crist said there are indications that insurance brokers have improperly steered business to insurers who pay the brokers the highest fees rather than seeking the best deals for their customers. There are also indications that companies may have engaged in bid-rigging.
The alleged practices could be in violation of Florida’s antitrust laws, Chapter 542, Florida Statutes. Penalties allow fines of $1 million for corporate violations, $100,000 for individuals and for three times the amount lost due to illegal activities.
Crist said the State Attorney General’s looks forward to working with the task force established by Tom Gallagher, Florida’s Chief Financial Officer. The Florida Attorney General is among several state attorney’s general, including New York, Massachusetts, California, Connecticut and Ohio, that have opened investigations into insurance industry practices....
The inquiry came three week after New York attorney general Eliot Spitzer filed a lawsuit against the biggest insurance broker in the US, Marsh & McLennan. He alleged that the broker was taking kickbacks in return for directing business to certain firms and was also involved in bid-rigging to set higher costs for customers. The suit also implicated several other firms.
Since the New York suit was filed, Marsh has fired four executives and suspended six others. The insurance firm Ace has fired two and suspended three, and two AIG workers have pleaded guilty to criminal charges in court.
www.insurancejournal.com/news/southeast/2004/22/06/47490.htm
December 3, 2004
Aon Sells Endurance Stake to Goldman Sachs
Associated Press
Aon Corp. on Friday said it sold most of its 16 percent stake in insurer Endurance Specialty Holdings Ltd. to Goldman Sachs Group Inc. for $320.5 million.
Aon, the world's second-largest insurance brokerage and consulting company, said it sold 9.8 million Endurance shares Thursday at $32.70 apiece. Endurance shares closed Thursday at $34.50, and Friday at $33.26.
Goldman Sachs, the New York-based investment bank, will resell the purchased shares, not keep them in its own portfolio, Endurance Chief Financial Officer James Kroner said.
Chicago-based Aon, which trails only rival Marsh & McLennan in size, helped found Bermuda-based Endurance in December 2001 in an attempt to create additional capacity in the market.
Aon held about 14.2 million shares, or 21 percent, of Endurance as recently as April, according to a regulatory filing.
Other major holders included Capital Z Financial Services Fund II LP, with 8.5 percent; Perry Corp., with 7.3 percent; and Thomas H. Lee and Texas Pacific Group, each with 13.4 percent.
Aon still has the rights to purchase another 4.1 million Endurance shares, the company said.
Aon shares closed Friday at $22.26, up 49 cents, or 2.2 percent. The stock is down about 30 percent since the middle of October, when it was learned that New York Attorney General Eliot Spitzer is investigating practices at several large insurance brokers, including Aon.
http://www.forbes.com/feeds/ap/2004/12/03/ap1691274.html
< < < FLASHBACK < < <
August 19, 2002
Look Out Aon -
Here Come the Lawyers
Aon’s recent revelations of “financial irregularities,” while not in a class with Enron or WorldCom, have drawn the inevitable wolf pack to the scent of blood. Late last week two prominent law firms, specializing in class action recoveries, announced that they had filed lawsuits against the Chicago-based insurance broker.
The Little Rock Arkansas-based firm of Cauley Geller Bowman & Coates, LLP, and the Law Offices of Leo W. Desmond in West Palm Beach Florida both announced that they had filed class actions in the United States District Court for the Northern District of Illinois. The class is defined as persons who purchased Aon securities between May 4, 1999 and August 6, 2002.
Desmond’s announcement indicated that the case has been brought against “Aon Corporation, Patrick G. Ryan and Harvey N. Medvin,” and stated that, “It is alleged that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10(b)(5) promulgated thereunder, by issuing a series of materially false and misleading statements to the market throughout the Class Period which statements had the effect of artificially inflating the market price of the Company’s securities.”
Cauley Geller’s announcement stated that, “The complaint charges Aon Corporation and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that defendants issued numerous statements and filed quarterly and annual reports with the SEC which described the Company’s earnings and financial performance.
The complaint alleges that these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (i) that the Company had materially overstated its net income by $27 million in 1999, by $24 million in 2000 and by $5 million in the first quarter of 2002; (ii) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (iii) that as a result, the value of the Company’s net income and financial results were materially overstated at all relevant times.”
Neither action has yet been certified as a class action by the court, and Aon has not yet commented on them, but it’s likely that the company will end up defending itself, or settling the actions for a significant amount.
Editor’s Note:
Before the trial bar begins howling that they’ve been unfairly described as savage predators, some balancing is in order. While the regulatory authorities have been less than successful in curbing the fraud and deception wrought by greedy corporate officers and their accounting firm lackeys, one non-governmental institution remains steadfast in its efforts to sanction corporate wrongdoing - plaintiffs’ attorneys.
Sure they do it for money and sometimes they target the innocent, but most often they get it right. The threat of lawsuits from the victims of corporate fraud, represented by competent counsel, is a far greater inducement to avoid misbehavior than all the rhetoric coming from Congress, and the feckless posturing of the current administration.
If they didn’t exist, the U.S. would be far worse off, as most corporate shenanigans would be swept under the rug, as they are in much of the rest of the world. Don’t forget, however, that these lawyers are in business to make money, just like the insurance industry - a fact they too often forget. If given an opportunity they’ll take it.
That’s why corporate honesty pays more in the long run than trying to cook the books. - CEB
o o o
May 18, 2004
Chubb Latest to Face N.Y. Probe
of Compensation Pacts
The Insurance Journal
The Chubb Corporation in Warren, N.J. has received a subpoena seeking information regarding certain compensation agreements between insurance brokers and Chubb’s insurance companies from the New York Attorney General Eliot Spitzer....
Marsh & McLennan, Willis Group and Aon Corporation previously confirmed that they have received subpoenas from Spitzer. The subpoenas are seeking information as part of a preliminary inquiry into compensation agreements between insurance brokers and insurance companies.
In February, the national, non-profit public policy group Washington Legal Foundation (WLF), wrote the New York and California attorneys general and insurance departments asking them to probe “two potentially damaging practices engaged in by some in the insurance brokerage industry.”
The two practices WLF wants targeted are placement service agreements (PSAs) and “leveraging” in the insurance brokerage industry. WLF alleges that these practices present conflicts of interest.
The group maintains that PSAs encourage brokers to steer customers to insurers that will profit the broker in contingency fees, but not necessarily benefit the customer.
“This is a troubling trend in the insurance brokerage industry,” said WLF Chairman and General Counsel Daniel J. Popeo. “Insurance brokers are paid to advocate for their customers, not themselves.”
WLF likened these agreements to abuses recently uncovered in the mutual fund industry by the Securities and Exchange Commission.
The practice of “leveraging” or “tying” refers to brokers coercing insurance companies into using their services to purchase their reinsurance in exchange for future referrals for their primary insurance business....
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August 18, 2004
Aon and CSC Create Strategic Alliance to Deliver Human Resources BPO Services
CHICAGO & EL SEGUNDO, Calif.--(BUSINESS WIRE) - Aon Corporation (NYSE: AOC - News) and Computer Sciences Corporation (NYSE: CSC - News) announced today that Aon Human Resources Outsourcing (HRO), a division of Aon Consulting Inc., has formed a strategic alliance with CSC to develop and deliver human resources business process outsourcing (HR BPO).
Under the agreement, CSC will provide information technology (IT) application and infrastructure outsourcing services to support future HR BPO engagements.
“We are delighted to enter into this agreement with CSC,” said Gary Budzinski, president, Human Resources Outsourcing, Aon Consulting. “Our clients will no doubt benefit from the capabilities of both organizations as we team up on future human resource outsourcing engagements.”...
Aon HRO provides outsourcing services to manage clients’ business processes in the areas of benefits, compensation, payroll, recruitment, development and learning, and performance management. The organization provides outsourcing services to more than 400 organizations, servicing a combined total of more than 3.5 million employees.
About Aon
Aon Corporation (www.aon.com) is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. The company employs approximately 52,000 professionals in its 600 offices in more than 120 countries....
Aon Consulting is among the top global human resources consulting firms, with 2003 revenues of $1.185 billion and 7,500 professionals in 140 offices throughout the world.
Aon Consulting delivers integrated consulting solutions to help clients with employee benefits, human resources, compensation, communication and management consulting....
o o o
October 23, 1999
FOR IMMEDIATE RELEASE:
Jeffrey H. Case Joins Aon Risk Services
As Executive Vice President
Jeffrey H. Case has joined the downtown Honolulu offices of Aon Risk Services Companies Inc. as executive vice president in charge of marketing.
Announcement of Case's association with the globally active insurance brokerage and risk management organization was made public today by John D. (Butch) Beck, president of Aon Risk Services Inc. of Hawaii.
Case was previously vice president of Marsh Risk & Insurance Services Inc., based in San Francisco....
Case graduated from Punahou School, earning a BA degree in economics from Denison University of Ohio and his Associate in Risk Management (ARM) designation from the Insurance Institute of America.
He was born and raised in Honolulu along with brothers Steve Case, chairman of America Online, and Daniel H. Case III, chairman of the Bay Area financial firm, Hambrecht & Quist, and sister Karen Case.
Aon Risk Services Companies Inc. is a subsidiary of Aon Corporation, a Fortune 500 company with more than 600 offices in 115 countries and 40,000 employees engaged in insurance brokerage, consulting and underwriting services....
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WTC News Briefs
IMPORTANT PEOPLE WHO MAY
HAVE CHEATED DEATH
"President Bush's cousin should have been in the World Trade Centre when it was attacked. Jim Pierce, managing director of AON Corporations, had arranged a business conference on the 105th floor of the South Tower where its New York offices were based. But his group was too large so they decided to move across the street to the Millenium Hotel. Two hundred AON staff are missing."
– Ananova, September 18, 2001
"For Mayor Willie Brown, the first signs that something was amiss came late Monday when he got a call from what he described as his airport security -- a full eight hours before yesterday's string of terrorist attacks -- advising him that Americans should be cautious about their air travel ... Exactly where the call came from is a bit of a mystery. The mayor would say only that it came from 'my security people at the airport.' Mike McCarron, assistant deputy director at SFO, said the Federal Aviation Administration 'routinely' issues security notices about possible threats. He said two or three such notices have been received in the past couple of months, but none in recent days."
– San Francisco Chronicle, September 12, 2001
o o o
January 7, 2002
Turning to sleepy insurance to
jazz up portfolios
By Beth Healy, Boston Globe
Forget tech. The hot new deals for deep-pocketed private equity firms are in the least sexy business on the planet: insurance.
In the wake of Sept. 11, a host of new insurers and reinsurers are opening their doors, with billions of dollars in backing from existing insurers and big-name buyout firms, including Boston's Thomas H. Lee Co. Lee recently has bet $475 million on three Bermuda insurance deals, after a year in which it made only one investment (in phone book publisher TRW) from its massive $6.1 billion fund.
Other investors leaping into the sector include Blackstone Group; Goldman, Sachs & Co.; and Warburg Pincus , all based in New York. Marsh & McLennan, the New York insurance brokerage (and parent of Boston fund manager Putnam Investments) is backing a start-up, as is Chicago's Aon Corp....
This is opportunism at its best. The last time new insurers launched was after Hurricane Andrew struck in 1992. Rates on property-casualty insurance policies soared following that natural disaster, much as they've skyrocketed since the terrorist attacks. Some customers are seeing renewal rates jump 300 percent and 400 percent.
And they're faced with having to buy more coverage, as their sense of risk has increased and as acts of terror are struck from typical policies. New kinds of special coverage will be required to guard against losses from terrorism and acts of war.
All this adds up to big new potential revenue streams for at least six ---- and possibly as many as a dozen ---- new insurers and reinsurers (firms that pick up excess liability from other insurers) and their investors. The start-ups are virtually all based in Bermuda, not for the golf, but for its tax-haven status.
And they are filling a need, industry experts say, with losses sustained by current insurance players estimated conservatively at $40 billion. The new entrants figure they can jump in and be competitive because they aren't grappling with losses from the latest catastrophe.
"A lot of capital went out of the business with the catastrophe and has to be replaced," said Lanny Thorndike, managing director at Century Capital, a Boston-based insurance investor.
Because of Sept. 11, he said, "there's a higher appreciation for risk, and with that comes higher returns for those who assume the risk."...
o o o
August 7, 2002
Aon accounting questioned
by SEC, drops spin off plan
By Bill Rigby
NEW YORK (Reuters) - Aon Corp. (AOC) said on Wednesday it may have to restate several years' earnings after regulators questioned its accounting practices.
The world's No. 2 insurance broker also put its underwriting unit up for sale, dropping plans to spin it off.
Aon shares fell as much as 34 percent to a seven-year low of $13.95 on the New York Stock Exchange, as investors recoiled from another firm with potentially unreliable accounts. They recovered slightly to finish the regular New York Stock Exchange trading session at $14.77, down $6.43, or 30.3 percent.
Aon stock has fallen more than 55 percent this year.
Aon, second only to Marsh & McLennan Cos. Inc. (MMC) in the insurance brokerage industry, also said earnings would be lower than forecast as it struggles to keep costs down.
"(The results) leave us with little confidence that management can accurately forecast Aon's results," Salomon Smith Barney analyst Ron Frank said. "The outstanding SEC accounting issues, even if they prove benign, will likely hang over the stock."
SEC QUESTIONS
The Securities and Exchange Commission questioned several items in Aon's accounts, including the reporting of investment write-downs, the timing of some costs and a reinsurance recoverable item and the decision not to consolidate certain special purpose vehicles.
Chicago-based Aon said it may have to restate earnings for the past three years, if the SEC says it is necessary.
"If (the SEC) thinks additional disclosure is appropriate, we're going to do it," Aon Chief Executive Patrick Ryan told analysts during a two-hour conference call. "There is not a revenue recognition problem."
The firm also said it was looking at alternatives -- including a sale -- for its underwriting unit, Combined Specialty Group, which it had planned to spin off, blaming poor stock market conditions.
"We will provide an update when new plans have been finalized," Ryan said.
The move is a blow for Aon management and investors, who were hoping to cash in on soaring insurance rates with the spinoff.
Late Wednesday, Moody's Investors Service cut Aon's senior unsecured debt rating one notch to "Baa1," its third-lowest investment grade, and said it may cut the rating again.
ACCOUNTING PROBLEMS
Aon's news caps several years of nagging problems for the company, which has struggled to consolidate its operations and cut costs after a string of acquisitions in the 1990s. The firm grew rapidly over the decade, becoming the only serious rival to Marsh, the world's long-established leading broker.
The firm lost 176 employees in the attacks on the World Trade Center on Sept. 11.
The SEC's questioning of its accounts suggests that the firm was aggressive with its profit reports. To remedy the situation, the SEC demanded that the firm release more information in its financial reports and stop using EBITDA numbers, which are potentially misleading earnings numbers, excluding a host of charges....
Aon is waiting to see whether the SEC will demand that it restate earnings in previous years to more accurately reflect the timing of some costs and charges and the consolidation of off-balance-sheet deals.
Aon's problems are more about presentation than hiding figures, Aon's CEO told investors and analysts in a conference call.
"We firmly believe that any adjustments made will not affect shareholder equity," Ryan said. "I believe they (the SEC) are going to try to help us resolve these issues, so that we won't have any concerns."
BREAK-EVEN FOR QUARTER
The news came as Aon reported it broke even for the second- quarter, compared with a profit of 11 cents a share a year earlier.
Results were torpedoed by a $36 million charge for losses from an underwriting agency that Aon has sued for fraud.
Profits were also cut by a charge to write down investments and an addition to reserves....
© 2002 Reuters
o o o
August 21, 2002
Another Class Action Lawsuit
Filed Against Aon
From Insurance Journal
The New York law firm of Wechsler Harwood Halebian & Feffer announced that it has filed a class action lawsuit in Federal Court in Illinois on behalf of shareholders against Aon Corp., following revelations of misstatements in the company's earnings reports.
The news follows two similar actions filed last week by law firms in Arkansas and Florida (See IJ Website August 19), and contains similar allegations, based on violations of Rules 10(b) and 20(a) of the Securities and Exchange Act, which affirm the right of a purchaser of securities to file an action for damages if there are grounds for affirming that the decision was based on a "material misrepresentation."
Aon's acknowledgment that it overstated earnings, and its agreement with the Securities and Exchange Commission to restate them for the years 1999-2002, has opened the world's second largest insurance broker up to a series of such civil suits....
o o o
September 13, 2002
Bernstein Liebhard & Lifshitz, LLP Announces
Class Action Lawsuit Commenced Against
Aon Corporation (AOC)
NEW YORK, NY--(INTERNET WIRE)--Sep 13, 2002 -- A securities class action lawsuit was commenced on behalf of all persons who purchased or acquired Aon Corporation (NYSE: AOC - News) ("Aon" or the "Company") securities between May 4, 1999 to August 6, 2002, inclusive (the "Class Period")....
The action is pending in the United States District Court for the Northern District of Illinois, Eastern Division. The complaint alleges that throughout the Class Period the Company issued a series of materially false and misleading statements regarding the Aon's earnings and financial performance....
On August 7, 2002, the company shocked the investing community when it announced, among other things, that the Securities and Exchange Commission ("SEC") had been investigating its financial results and was questioning many aspects of the Company's financial statements. Aon also stated that, if the SEC required, it will have to restate its earnings for the past three years and reduce its net income by the numbers stated above.
Following this announcement, shares of Aon fell over 30% to close at $14.77 per share....
o o o
Date Unknown
P&C INSURANCE COMPANY SWITCHES CAPTIVE MANAGERS-AGAIN!
At another unknown date, Kamehameha Schools’ controversial captive subsidiary, P&C Insurance Company Inc., parted ways with Aon.
It is also unknown at this time WHO their new captive manager might be.
Stay tuned....
~ ~ ~
UPDATE: Surprise! The NEW captive manager is the same as the OLD captive manager: Marsh & McLennan !!!
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Originally posted: January 3, 2003
Last Update May 19, 2009, by The Catbird
CHRONOLOGY
January 3, 2003: Originally posted on www.the-catbird-seat.net
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