In Thursday's corporations and securities law news, in his first prosecution of the insurance industry, New York Attorney General Eliot Spitzer today sued Marsh & McLennan Cos., the world's largest insurance brokerage, for steering clients to certain insurers which resulted in lucrative payoffs for the broker. Spitzer also announced two American International Group Inc. (AIG) executives have been arrested. American International, Hartford Financial Services Group Inc., Ace Ltd. and Munich Re were also implicated in the allegations. AIG announced [PDF] earlier this month that the SEC was recommending civil action against company for violations of securities laws. Read the New York Attorney General press release announcing the allegations here. Read the complaint against Marsh here [PDF]. Bloomberg has more.
In other news, the SEC opened an investigation into the newspaper industry following disclosures of fraudulent practices in circulation reporting in recent months. AP has more.... BB&T Corp., a Winston-Salem-based bank,filed a lawsuit in the US District Court in Greensboro against the IRS related to a claim that the company is owed a $3.3 million tax refund. The Business Journal has more.... Daniel Boyle, a former Enron Corp. executive, on trial for fraud and conspiracy related to the Nigerian barge deal, testified that he knew Enron had made a bogus deal with Merrill Lynch in order to post fraudulent profits when he received an email from Treasurer Ben Glisan Jr. which said the energy giant had to get Merrill Lynch out of the deal. Boyle maintains he had no part in the 1999 deal between former CFO Andrew Fastow and Merrill that guaranteed Enron would buy back three electricity-generating barges floating off the Nigeria coast. Read the indictment against Boyle here [PDF]. JURIST's Paper Chase has background on the Enron barge trial. The Houston Chronicle has more and background on the case.... Former Tyco chief executive Dennis Kozlowski and former CFO Mark Swartz have sued Twin City Fire Insurance to pay legal bills have surpassed $25 million. Kozlowski and Swartz face a second trial on charges that the pair looted over $600 million from Tyco in January. Read the indictment against Kozlowski and Swartz here [PDF]. AP has more.