Insurance industry

Marsh & McLennan Chairman Steps Down Amid Bid-Rigging Scandal

Strategic Insights

Oct 25, 2004 — 1 min read

Marsh & McLennan's Chairman and CEO, Jeffrey Greenberg, has resigned 11 days after the company was implicated in a major bid-rigging scandal. The move comes as a result of pressure from New York Attorney General Eliot Spitzer, who announced a civil suit against Marsh on October 14th. Greenberg's departure marks a significant step in the company's attempt to address the crisis, but experts warn that it may not be enough to restore its credibility.

Key Takeaways:

Jeffrey Greenberg resigned as Chairman and CEO of Marsh & McLennan on October 25th, 11 days after the company was implicated in a bid-rigging scandal.
Greenberg's resignation is seen as a result of pressure from New York Attorney General Eliot Spitzer, who announced a civil suit against Marsh on October 14th.
The company has seen a significant loss in market capitalization, with a decline of about half its market value in the last week.
Marsh & McLennan will be replaced by Michael Cherkasky, a former head of Kroll and a former prosecutor who once worked with Spitzer.
The company's stock price has suffered due to the scandal, with some analysts warning that Greenberg's departure may not be enough to restore its credibility.
Marsh & McLennan has been embroiled in several legal troubles, including its role in the mutual fund scandal and the controversial pay package given to former New York Stock Exchange Chairman Richard Grasso.
The company has announced reforms in the way its insurance broker unit operates, including the elimination of contingent commission fees.

Statistics:

Marsh & McLennan's market capitalization has declined by about half in the last week.
The company has lost $X billion in market value since the scandal was announced.
Greenberg accumulated a $X billion personal fortune while leading the company.
Marsh & McLennan's stock price has fallen by X% since the scandal broke.

Sources:

NPR News, October 25, 2004
New York Attorney General's Office, October 14, 2004
Steve Inskeep, NPR News, October 25, 2004
Jim Zarroli, NPR News, October 25, 2004
Keith Crocker, Professor of Insurance and Risk Management at Pennsylvania State University

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