SEC Initiates Probe Into Marsh's Investment Funds
By Michael Ha
NU Online News Service, Dec. 23, 3:06 p.m. EST?Marsh & McLennan Companies Inc., already under scrutiny by state attorneys general and industry regulators over allegations of bid-rigging and other abuses, said the Securities and Exchange Commission is now probing MMC investment-funds' business.[@@]
The world's largest brokerage firm revealed this week, in a filing, that the SEC has initiated an investigation into the stakes that MMC directors and executive officers, as well as shareholders, have in the firm's investment funds.
The investigation includes Trident fund, which makes private equity and equity-related investments in the global insurance and financial services industries, and is part of MMC Capital. MMC Capital is a private equity firm based in Greenwich, Conn. It is a wholly owned unit of New York City based MMC.
MMC's Trident funds, which raised more than $3 billion during the past decade, have invested in several insurance companies in the past, including Arch Capital Group, Axis Capital Holdings and Travelers Property Casualty Corp.
MMC's SEC filing noted: "On December 21, 2004, Marsh & McLennan Companies Inc. received a request for information pursuant to a formal investigation commenced by the Securities and Exchange Commission.
"The request for information seeks documents and other information concerning related-party transactions in which a director, executive officer or 5 percent stockholder of MMC had a direct or indirect material interest, including transactions with the Trident funds."
New York City-based MMC said it "intends to cooperate fully in the investigation."
MMC was sued in October by New York Attorney General Eliot Spitzer after an investigation that alleged bid-rigging and steering insurance contracts to insurers paying profitable contingent fee commissions based on volume placements. The action has sparked a national investigation into contingent fee commissions by other state attorneys general and insurance regulators.
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