NEW YORK—Three former Marsh Inc. executives accused in connection with New York state's investigation of bid rigging at the broker were acquitted of all charges Monday.
The executives—Joseph Peiser, former managing director and head of Marsh's global broking excess casualty unit; Greg J. Doherty, former Marsh senior vp and ACE USA local broking coordinator team leader; and Kathleen M. Drake, former Marsh managing director and local broking coordinator team leader—are not guilty of scheme to defraud and restraint of trade charges, New York County Supreme Court Judge James A. Yates ruled.
The judge did not comment on his ruling, which was delivered in front of a full courthouse including family members and former colleagues. If convicted, the executives could have faced up to four years in prison.
“It's been five long years, but the judge has been very patient and he kept an open mind. I am very appreciative” Mr. Peiser said following the acquittal.
Defense lawyers said the acquittal was “well deserved.”
“I still believe Greg Doherty never should have been prosecuted,” said Mr. Doherty's attorney, Maranda Fritz of Hinshaw & Culbertson L.L.P. in New York. We are “so grateful that he can begin to rebuild his life,” she said.
Monday's ruling followed the February 2008 convictions of former Marsh Managing Directors William Gilman, who has been called the “architect” of the bid-rigging scheme, and Edward J. McNenney, deemed the “enforcer.” Messrs. Gilman and McNenney were found guilty of violating New York's antitrust law, but were acquitted of all other charges including fraud and grand larceny. They are appealing their convictions.
Prosecutors argued the defendants in the latest trial misled the broker's excess casualty clients by steering business to selected insurers and preventing a competitive bidding process. During closing arguments Monday, Assistant Attorney General Evelyn Baez asked the judge to “send a message to the defendants that no matter how powerful, no one is above the law.”
Prosecutors did not comment after the verdict, and the New York Attorney General's office did not respond to a request for comment.
The three were among a group of seven executives indicted in 2005 by then-New York Attorney General Eliot Spitzer following a probe of the broker's contingent commission practices. Prosecutors accused the brokers of colluding with employees at various insurers—including American International Group Inc., ACE USA, Liberty International Insurance Co., Zurich American Insurance Co. and others, to rig the market for excess casualty insurance. Prosecutors called the scheme “pay to play.”
Marsh itself has not faced any criminal sanctions over the scandal and in January 2005 paid $850 million restitution for policyholders to end regulators' bid-rigging and fraud probes.
Two other individuals are still awaiting trial.
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