THE WILLIS GROUP
Sightings from The Catbird Seat
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April 7, 2005
Goldman Sachs Analysts Influenced by Banking Interests
In violation of NASD and NYSE regulations, analysts at Goldman Sachs were encouraged to participate in investment banking activities and were compensated with raises and bonuses.
The SEC’s complaint against Goldman Sachs includes reports that certain analysts were “known to be swayed by banking to support certain names.”
During meetings with potential investment banking clients, known as “pitches,” firm representatives implicitly suggested that Goldman Sachs would provide favorable research coverage after the investment banking transaction.
One analyst had doubts about ratings on AT&T’s stock, but wrote in an email that “investment banking considerations prevented [him] from making a change” in his recommendations....
In July 2000, a pitch book for the Willis Group stated: “[the analyst] has sold more stock than any research analyst in the sector.”...
If you have purchased shares in any of the following stocks from Goldman Sachs, you may have a potential stock fraud claim. Contact the Consumer Justice Group immediately for an evaluation of your case.
AT&T; Crosswave Communications; Crown Castle; Exodus; GenProt; Global Crossing; Loudcloud; StorageNetworks; WebEx; Willis; Winstar Communications; WorldCom; 360Networks
www.consumerjusticegroup.com/goldmansachs.htm
For more, GO TO > > > Dirty Gold in Goldman Sachs
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March 8, 2005
Hatch Investigating Willis Group
By Sheryl Jean, St. Paul Pioneer Press
Minnesota Attorney General Mike Hatch is investigating whether the Willis Group, the nation’s third largest insurance broker, may be involved in illegally charging contingent commissions to clients and steering business to certain insurance companies, according to documents filed Tuesday in Ramsey County district court.
According to the attorney general, Willis has not responded to requests for documents since mid-December, so Hatch is asking the court to compel Willis to provide additional documents, including client contracts, internal e-mails and revenue statements.
Hatch has several internal e-mails, obtained from sources other than Willis, and interviews with two large Willis customers that provide “just cause that Willis is involved in fraud,” he said in an interview Tuesday....
Since October, the attorney general’s office has been investigating possible illegal payment agreements or bid rigging between insurance companies and brokers doing business in Minnesota. In addition, Gov. Tim Pawlenty in October asked the state Commerce Department, the regulatory agency, to investigate the same matters....
Minnesota is one of several states that expanded an industry-wide probe of the insurance industry initiated Oct. 14 by New York Attorney General Eliot Spitzer. On that day, Spitzer sued Marsh & McLennan Cos., accusing it of bid rigging, price fixing and using incentive fees to control the sale of commercial insurance.
Willis also has said it is under investigation by several state regulators, including Spitzer....
In its investigation, the Minnesota attorney general’s office has requested information from dozens of insurers, insurance brokers and other companies, Hatch said. He declined to name any of the companies....
“Willis is not representing its clients’ best interests,” Hatch said. He claims that Willis’ customers had no knowledge of the company’s strategy.
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April 23, 2004
SPITZER OPENS PROBE OF
INSURANCE BROKERS
USA Today
NEW YORK (Rueters) – New York Attorney General Eliot Spitzer, whose investigations of the mutual fund and stock research businesses led to industry-wide reforms, is now probing the fees earned by insurance brokerages.
Marsh & McLennan (MMC), Aon (AOC) and Willis Group Holdings (WSH), the world’s three largest insurance brokers, said late Thursday and Friday they received subpoenas from Spitzer’s office asking for information about compensation arrangements made with the insurance companies whose policies they sell.
At issue is whether fees and commissions paid to brokers by insurance companies as incentive to sell their products is a fair business practice. Brokers have a duty to get clients the best policy at the best price, which would be compromised if brokers simply sell what makes them the most money.
A public watchdog group, the Washington Legal Foundation, said the compensation agreements “can compromise the broker’s fiduciary duty to represent the best interest of their clients.”
While the investigation is only in the early stages, any increase in regulation that may result could have a significant impact on the industry. On average the compensation agreements account for about 20% of brokerages’ profits, a study showed....
Such agreements have similarities to arrangements that were at issue in the mutual fund industry investigations....
Marsh, Willis and Aon all said they adequately disclosed the compensation agreements, either through fee agreements with clients, invoices to clients or on Web sites.
However, the Washington Legal Foundation said the disclosures are “often so convoluted – and in some cases omitted altogether – that many companies are unaware their brokers have these side agreements in place.”...
For more regarding Marsh & McLennan, GO TO > > > RICO in Paradise
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July 9, 2004
State More Inviting To ‘Alien Insurers’
By Deborah Adamson, Honolulu Advertiser
International insurance companies now will find Hawaii a friendlier place to do business.
In a bid to become the leading center for insurance in the Pacific, Hawaii has enacted a law to make it easier for insurers based out of the country to set up their main U.S. offices here. These “alien insurers” would then be able to launch their entry into the broader Mainland market from the Islands.
“It elevates the status of the state of Hawaii in the world of international insurance,” said state Insurance Commissioner J.P. Schmidt. “It provides an opportunity for additional capital investment and economic diversity in the state.”
Signed in June, Act 120 already has attracted an inquiry from a major South Korean insurer, Schmidt said.
The new law would treat alien insurers as if they were out-of-state insurance companies, which are called “foreign insurers” in industry parlance. As such, the application and licensing process would be simpler and less costly, he said.
In turn, the state benefits from the taxes paid, jobs created and capital brought in by these non-American companies.
Hawaii is one of about a dozen states that have passed laws enabling them to become ports of entry for alien insurers, Schmidt added.
The overall goal is to develop “clean” industries, such as financial services, in the Islands, a path that has been successfully taken by island economies such as Bermuda, the Cayman Islands and the British Virgin Islands. International business brings in significantly more revenue for Bermuda than tourism....
Hawaii also has had success in attracting a segment of the domestic insurance industry known as “captive insurance.” This sector consists of corporations that set up subsidiaries to insure themselves.
“Because of the experience of captive insurance, everyone jumped on board,” state Rep. Ken Hiraki, chairman of the House Consumer Protection and Commerce Committee, said of Act 120....
In 1986, Hawaii passed a law that gave captive insurers tax breaks and greater flexibility in setting up their policies, said Craig Watanabe, the captive insurance administrator for the state’s Insurance Division.
Today, Hawaii is second in the country in the number of captive insurers calling the state their headquarters, trailing only Vermont. The state is among the top 10 in the world.
At the end of 2003, there were 122 captive insurers in Hawaii with total assets of $3.9 billion. They included companies such as Nike, Clorox, Occidental Petroleum, Washington Mutual, Marriot and Nissan. About $741 million of the assets are managed by local banks, Schmidt said.
About 26 states have captive insurance laws, but Hawaii charges a 0.25 percent tax on premiums versus 5 percent in other states, he said. Hawaii also gives insurers more flexibility in creating different types of coverage, while states such as New York are more strict.
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February 17, 2003
Willis Continues Captives Expansion
with New Hawaii Office
New York, NY - Willis Group Holdings (NYSE: WSH), the global insurance broker, announces today the opening of a new captive office in Hawaii serving the growing pool of companies seeking alternatives to the traditional insurance market. Jason Palmer, formally of Willis’ Burlington, Vermont office is leading the new venture in Hawaii....
With nearly seven years of experience in the Vermont captive industry and a good foundation in the Hawaii captive marketplace, including eight Hawaii captive licenses, and many more in the pipeline, Jason is sure to be a welcomed addition to the growing industry....
Willis Management, the Captive Practice Group of the global insurance broker, already a premier force in the Hawaii Captive Insurance industry, joins its sister operations in Bermuda, Grand Cayman, and Vermont under the Willis North American Captive Practice which is led by Guy Ragosta.
Willis Group Holdings Limited is a leading global insurance broker, developing and delivering professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services to corporations, public entities and institutions around the world. With over 300 offices in more than 80 countries, its global team of 13,000 associates serves clients in some 180 countries.
Willis is publicly traded on the New York Stock Exchange under the symbol WSH. Additional information on Willis may be found on its web site: www.willis.com.
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November 9, 2001
Paul Hazen Named To KSL Recreation
Board of Directors
The Timeshare Beat
LA QUINTA, CA - KSL Recreation Corp. yesterday announced that Paul Hazen has been appointed to its Board of Directors.
Headquartered in La Quinta, KSL owns and operates a portfolio of seven of America’s top luxury destination resorts.
Mike Shannon, chairman and CEO of KSL Recreation Corp., commented, “I am very pleased to announce Paul Hazen’s election to our Board of Directors. ... His extensive banking and real estate background supports KSL’s long-term strategic vision to continue to expand its portfolio of luxury resort properties.
Hazen is the former chairman and CEO of Wells Fargo & Co. Currently, he also serves as a senior advisor to Kohlberg Kravis Roberts & Co, as chairman of Accel-KKR, deputy chairman and director of Vodafone Plc., and a director of Safeway Inc., Phelps Dodge Corp., E-piphant Inc., Xstrata AG, and Willis Group Ltd....
KSL Recreation Corp. is the La Quinta, California-based owner and operator of La Quinta Resort and Club, and PGA WEST in La Quinta; Arizona Biltmore Resort & Spa in Phoenix; The Claremont Resort & Spa; Miami’s Doral Golf Resort and Spa; Grand Traverse Resort and Spa; Maui’s Grand Wailea Resort Hotel & Spa; and Greater Atlanta’s Lake Lanier Islands Resort....
For more, GO TO > > > Dirty Gold in Goldman Sachs; Paradise Paved
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Last Update June 3, 2007, by The Catbird