Anthem Subpoenaed in Insurance Probe

Anthem Inc. has received a subpoena from Connecticut Attorney General Richard Blumenthal, who is investigating how the big health insurer handles its business with brokers, according to Reuters.The subpoena “just lays out some standard questions about commission and bonus structure,” Anthem spoke...

By Stephen Green • Oct. 27, 2004

Saving Gracefully

Remember those virtual pets that were all the rage a few holiday seasons back? Inanimate though they may be, the still-popular toys require proper care and feeding. Fail to provide those essentials, and you soon find yourself looking for a virtual pet cemetery.Information is much like that: each ...

By Anne Stuart • Oct. 27, 2004

Courts and Torts: Workplace Rumors

Marie Leone’s “Courts and Torts” column appears monthly. Contact her at [email protected] the fifth in a series of a flip-flops by the National Labor Relations Board (NLRB), management came out the winner in June when the NLRB sided with IBM Corp. and ruled that the “Weingarten right” does no...

By Marie Leone • Oct. 26, 2004

Aon Seen Sinking into the Marsh

New York Attorney General Eliot Spitzer’s investigations are sending broadening shock-waves through the property-casualty insurance industry, claiming the chairman of the word’s biggest insurance broker and reportedly soon to ensnare the second-biggest one.On Monday, Jeffrey Greenberg, chairman a...

By Stephen Taub • Oct. 26, 2004

Marsh CEO Expected to Resign

Jeffrey Greenberg, the chief executive and chairman of Marsh & McLennan Cos., is expected to resign from the insurance brokerage, the Financial Times Web site reported late Friday.The move is expected to help ignite settlement talks with New York Attorney General Eliot Spitzer, who sued the c...

By Craig Schneider • Oct. 25, 2004

AIG Faces New Grand Jury Probe

American International Group Inc. announced on Thursday that the U.S. Attorney’s Office for the Southern District of Indiana has launched a federal grand jury investigation into its dealings with cell-phone distributor Brightpoint Inc.The Securities and Exchange Commission brought civil charges a...

By Stephen Taub • Oct. 22, 2004

An Industry Mired in Scandal

First came investment banking; then mutual funds; now the insurance industry is mired in scandal, the latest target of Eliot Spitzer, New York’s formidable attorney general. On October 14th he filed civil charges against Marsh & McLennan, the world’s biggest insurance broker, and announced se...

By Economist Staff • Oct. 22, 2004

The Insurance Scandal: Just How Rotten?

First came investment banking; then mutual funds; now the insurance industry is mired in scandal, the latest target of Eliot Spitzer, New York’s formidable attorney general. On October 14th he filed civil charges against Marsh & McLennan, the world’s biggest insurance broker, and announced se...

By Economist Staff • Oct. 22, 2004

Two Trials for Kenneth Lay

Former Enron Corp. chairman Kenneth Lay will face not one criminal trial, but two.Lay, former Enron chief executive officer Jeffrey Skilling, and former chief accountant Rick Causey had requested separate trials in federal court in Houston. U.S. District Judge Sim Lake did rule that the four crim...

By Stephen Taub • Oct. 21, 2004

Bumper Crop of Corporate Probes

Stephen Taub’s opinion column appears on Wednesday. Contact him at [email protected] Mae, Krispy Kreme, Marsh & McLennan, American International Group. This year’s “fall harvest” — another bounty of companies under investigation by the Securities and Exchange Commission, the Depar...

By Stephen Taub • Oct. 20, 2004

Are Health Insurers Next for Spitzer?

New York State Attorney General Eliot Spitzer now has the cross-hairs trained on the health insurance industry, according to The New York Post.The newspaper reported that Spitzer — who late last week socked major brokers and insurers of commercial lines when he accused Marsh & McLennan of sol...

By Stephen Taub • Oct. 20, 2004

Marsh Suspends Use of MSAs

Marsh & McLennan Cos. Inc. announced on Friday that its risk and insurance services subsidiary will immediately suspend its practice of market services agreements (MSAs) with insurance carriers, in light of the allegations and questions raised by New York State Attorney General Eliot Spitzer,...

By Stephen Taub • Oct. 18, 2004

Rite Aid Exec, 76, Gets 10 Years in Prison

Franklin Brown, former vice chairman and chief counsel of Rite Aid Corp., was sentenced last week to 10 years in federal prison for his role in the massive accounting fraud at the company. He was convicted in a jury trial last October of crimes including making false statements to the Securities ...

By Stephen Taub • Oct. 18, 2004

Flu-Shot Maker Faces Federal Probes

Chiron Corp., which recently suspended production of its Fluvirin flu vaccine, is being investigated by at least three federal agencies.Officials at the Emeryville, Calif.-based company said in a regulatory filing that the Securities and Exchange Commission has launched an informal inquiry to det...

By Stephen Taub • Oct. 15, 2004

Risks and Benefits: The CFO as CRO?

At first glance, chief financial officers seem splendidly positioned to be the czars of enterprise risk management.Indeed, many already oversee one traditional area of risk management: the operational hazards often covered by property-casualty insurance. Typically, the corporate risk manager — wh...

By David Katz • Oct. 14, 2004

A Few Good Suppliers

Cut costs by trimming the number of your suppliers. Heard it before? It’s the business equivalent of “diet and exercise.” But paring down to just a few suppliers can be too much of a good thing. The Hackett Group, an Atlanta-based business-advisory firm, says that many leading companies are actua...

By Ilan Mochari • Oct. 14, 2004

Pension Funds Angle for ”Proxy Access”

Yesterday, four of the country’s largest pension funds threatened to shake up the proxy process.The California Public Employees’ Retirement System (Calpers), the New York State Common Retirement Fund, the AFSCME Employees Pension Plan, and the Illinois State Board of Investment announced a joint ...

By Stephen Taub • Oct. 13, 2004

Investor Group Names 25 Underperformers

The Council of Institutional Investors (CII), an organization of large public labor funds and corporate pension funds, released its 14th annual “focus list” of 25 underperforming companies.According to the council, companies included on the list had total stock returns that lagged their broad mar...

By Stephen Taub • Oct. 12, 2004

Guilty Plea for Another Ex-Enron Exec

Timothy Despain, a former assistant treasurer for Enron Corp., pleaded guilty on Tuesday in U.S. District Court in Houston to conspiracy to commit securities fraud. He admitted that from 1999 through the fall of 2001, he and his superiors falsely represented to credit-rating agencies that Enron’s...

By Stephen Taub • Oct. 7, 2004

Another Enron CFO Departs

Houston-based energy company Enron Corp. announced in a government filing Friday that Raymond M. Bowen resigned as executive vice president, chief financial officer, and treasurer, effective immediately.Bowen, who joined Enron in 1996, became treasurer in November 2001, shortly before the company...

By Stephen Taub • Oct. 5, 2004

For AIG, Bad Press Begets Bad Press

More troubles for American International Group.The insurance giant is already being investigated by the Department of Justice and the Securities and Exchange Commission for transactions marketed to PNC Financial Services Group Inc. Now AIG has announced that the commission will probably bring a s...

By Stephen Taub • Oct. 5, 2004

SEC Probes Delphi-EDS Deals

The Securities and Exchange Commission has launched an investigation into Dephi Corp.’s dealings with Electronic Data Systems Corp. and another information-technology provider.The investigation marks a somewhat unusual turn of events. Although there have been scores of SEC investigations of accou...

By Stephen Taub • Oct. 1, 2004

Justice Investigating Fannie Mae: Report

The problems are piling up at Fannie Mae. On the heels of a federal regulator’s report detailing earnings manipulation and other accounting problems, the Justice Department has launched a probe into possible accounting fraud at the giant mortgage company, according to The Wall Street Journal.The ...

By Stephen Taub • Oct. 1, 2004

SEC Charges Ex-CFO with Insider Trading

The Securities and Exchange Commission has filed insider-trading charges against Mark Kelly, the former finance chief of Auto One Finance, a subsidiary of Golden State Bancorp. The SEC also leveled the same charge at three other individuals. The commission asserted that Kelly was asked to help wi...

By Stephen Taub • Sept. 30, 2004

Fannie Mae Restatement May Be on Tap

Fannie Mae seemed to put many of its problems behind it on Monday, when the company agreed to sweeping changes generated by a federal regulatory agency’s critical assessment of Fannie’s accounting policies.Nevertheless, it became clear on Tuesday that the nation’s largest buyer of mortgages hadn’...

By Stephen Taub • Sept. 29, 2004