Three Ex-Marsh Exec Acquitted in Spitzer Bid-Rigging Case

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Three former Marsh Inc. executives have been acquitted of criminal charges in a bid-rigging and price-fixing scheme in which they were accused of colluding to steer clients to favored insurers.

Joseph Peiser, who led Marsh’s excess casualty unit, and brokerage executives Greg Doherty and Kathleen Drake were found not guilty by Justice James Yates of the New York State Supreme Court in Manhattan of scheming to defraud and antitrust charges, lawyers for Peiser and Drake said.

The defendants were among eight former Marsh executives indicted in September 2005 by Eliot Spitzer, then New York’s attorney general. Spitzer accused the executives of colluding with American International Group Inc., units of Ace Ltd and Zurich Financial Services AG, Liberty International Insurance Co. and others to rig the excess casualty insurance market from 1998 to 2004.

The indictments came after Marsh’s parent agreed in January 2005 to pay $850 million to settle related civil charges by Spitzer.

Marsh & McLennan did not face criminal sanctions, and did not admit wrongdoing in settling the civil charges. Peiser and Drake were managing directors at Marsh, while Doherty was a senior vice president.

“Peiser should never have been charged,” said his lawyer Jerry Bernstein, of Blank Rome LLP in New York. “Just because he was head of global broking in North America, and because some people at Marsh may have done some bad things, does not mean he was guilty.”

Peter Driscoll, a partner at Driscoll & Redlich in New York who represented Drake, said his client “devoted her life to Marsh. She thought she hadn’t done anything wrong, and that the verdict is what would happen.”

Yates in February 2008 found two other former Marsh managing directors, William Gilman and Edward McNenney, guilty on an antitrust charge, though they were acquitted on other charges.

Bernstein said Peiser intends to return to the insurance industry.

Driscoll said he did not know Drake’s plans.