Some Marsh & McLennan Cos. shareholders called for Chief Executive Officer Jeffrey Greenberg resignation after the company lost half its market value because of New York Attorney General Eliot Spitzer’s accusations of bid- rigging and fraud.
“What occurred there was rampant,” said James Huguet, who manages $1.4 billion at Great Companies LLC and is selling shares of Marsh, the world’s largest insurance brokerage. “This happened on Jeff’s watch. You’ve got to rework the culture of Marsh.”
Spitzer’s investigation has been the most damaging of a host of regulatory probes against New York-based Marsh during the last two years. Trading abuses at Marsh’s Putnam Investments forced out senior executives last year. The company’s Mercer Inc. consulting unit is under investigation by the Securities and Exchange Commission for its relationships with investment managers and consultants.
Marsh spokeswoman Barbara Perlmutter declined to comment. Greenberg didn’t return a phone message left today at his New York residence.
Greenberg, 53, the son of American International Group Inc. Chairman Maurice “Hank” Greenberg, stands in the way of a potential settlement with Spitzer, some investors said. Spitzer all but called for the younger Greenberg’s ouster last week by refusing to negotiate with Marsh’s current management and urging the company’s board to “look long and hard” at Marsh leadership.
“The odds of a quick settlement go up dramatically if Jeff steps down,” said Michael Chren, who helps manage $15 billion in equities at Cleveland-based National City Investment Management.
The Wall Street Journal reported earlier that Marsh’s non- management directors have talked with Spitzer about having Greenberg step aside to jump-start talks. The 10 outside directors met on-and-off for most of yesterday to discuss the crisis, the newspaper said. The company has a total of 16 directors.
“The board is working very intently,” director Oscar Fanjul said today when reached on his mobile phone. He declined to comment on details of board discussions.
Board members Zachary Carter, Stephen Hardis, Gwendolyn Stewart King, Adele Simmons, David Olsen and Lewis Bernard, didn’t return calls to their offices. Morton Schapiro didn’t return calls and emails for comment to his office. Ian Lang’s wife said he couldn’t be reached for comment. Robert Erburu didn’t return a phone call to his home.
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