Marsh settles with N.J., Ohio pension funds
TRENTON, N.J. (Legal Newsline) - A class action lawsuit against Marsh & McLennan filed by pension funds in New Jersey and Ohio has tentatively been settled for $400 million.
Marsh & McLennan Companies was alleged to have made false and misleading statements to investors related to contingent commissions from insurers. In agreeing to the settlement, it admitted no wrongdoing or liability.
The suit was filed in U.S. District Court in the Southern District of New York in October 2004 on behalf of shareholders holding stock in the company from Oct. 14, 1999-Oct. 13, 2004.
"This is a substantial agreement that settles the claims we raised against Marsh in our suit to recover investment funds lost by our pension fund," New Jersey Attorney General Anne Milgram said. "We also believe the settlement best serves the interests of class members."
Marsh & McLennan were charged in the class action lawsuit with making false and misleading statements in its public filings and other public communications in connection with an insurance brokerage industry practice of brokers charging and collecting contingent commissions from insurers.
The plaintiffs alleged that Marsh & McLennan were in violation of federal securities laws by misrepresenting the nature of its contingent commission revenue and that the price of Marsh & McLennan stock dropped significantly when information was disclosed correcting the alleged misrepresentations and omissions.
Marsh & McLennan has denied making any false or misleading statements or otherwise violating federal securities laws, denied liability and denied that plaintiffs were damaged.
The lead plaintiffs in the legal action were the New Jersey Division of Investment in the Department of Treasury, the Public Employees Retirement System of Ohio, the State Teachers Retirement System of Ohio and the Ohio Bureau of Workers' Compensation.
The tentative settlement, mediated by retired Judge Daniel Weinstein, received preliminary approval this week from U.S. District Court Judge Colleen McMahon with a final approval scheduled for Dec. 23.
New Jersey's portion of the settlement has yet to be determined as the amount of recovery depends on when shares were purchased or sold and because the exact number of claims to be filed is not yet known. The estimated average recovery is 77 cents per share.
New Jersey and Ohio, subject to court approval, will also each receive expenses as lead co-plaintiffs in connection with the filing.