Aon Settles Corruption Probe with
3 States for $190 Million
Complaint Cites Involvement of Top Execs
The Insurance Journal
New York Attorney General Eliot Spitzer and Acting New York State Insurance
Superintendent Howard Mills, together with Connecticut Attorney General Richard
Blumenthal, Illinois Attorney General Lisa Madigan and Illinois Acting Director of
Insurance Deirdre Manna, today announced an agreement with the nation’s second
largest insurance brokerage to resolve allegations of fraud and anti-competitive
Under the agreement, the Chicago-based Aon Corporation is providing $190
million over a 30-month period for restitution to policyholders and is adopting a
new business model designed to avoid conflicts of interest. In addition, Aon’s
Chairman and CEO, Patrick G. Ryan, will issue a public statement apologizing for
Aon’s improper conduct according to the statement issued by Spitzer’s office.
“The underlying complaint in this case shows that improper conduct was pervasive
at Aon,” Spitzer said. “To its credit, however, the company has acknowledged the
problems, has agreed to compensate policyholders and has adopted reforms that
will provide greater accountability in the future.”…
The agreement with Aon was modeled after an earlier agreement reached January
31 with the nation’s largest insurance broker, Marsh & McLennan Companies, for
The Aon complaint cites the involvement of Ryan in efforts to increase placements
with an insurance company in exchange for that company’s use of an Aon subsidiary
(Aon Re) for reinsurance brokering.
The complaint also alleges that Michael O’Halleran, Ryan’s second-in-command,
personally negotiated “clawback” arrangements in which Aon Re would provide
insurers with discounts or rebates on its reinsurance commissions on the condition
that Aon could recover or “claw back” these discounts through retail placements
made with the same insurers….
The civil complaint filed today in State Supreme Court in Manhattan and the
citation issued by the New York Insurance Department allege that for years Aon
received special payments from insurance companies that were above and beyond
normal sales commissions. These payments – known as “contingent commissions” –
were characterized as compensation for “services to underwriters” but were, in
fact, rewards for the business that Aon steered and allocated to the insurance
Spitzer’s office and the Insurance Department have said they have uncovered
evidence showing that the “practice distorts and corrupts the insurance
marketplace and cheats insurance customers.”…
Spitzer’s complaint against the company cites internal communications in which
top executives openly discussed these efforts to maximize Aon’s revenue and
insurance companies’ revenues – without regard to Aon’s clients’ interests….
Spitzer’s office and the New York State Department of Insurance said they
are continuing a broad investigation of the insurance industry. To date, 10
executives from four companies have pleaded guilty to criminal charges
stemming from the probe.
$ $ $
October 26, 2004
Aon Mired in Marsh
By Rich Duprey, The Motley Fool
As Marsh & McLennan(NYSE: MMC) struggles to stay afloat in a quagmire of
alleged bid-rigging and price-fixing, another industry giant, Aon Corp.(NYSE:
AOC), has suddenly found itself flailing about for buoyancy as well.
New York State Attorney General Eliot Spitzer has allegedly found proof that
the world’s second-largest insurance broker was steering business to insurers that
paid incentives to the company, a possible violation of the state’s fraud and
antitrust laws, as well as evidence of the practice of “tying,” whereby the broker
threatens to stop recommending an insurer’s policies unless it agrees to use the
broker to place its own reinsurance policies.
The alleged sins of Marsh & McLennan are overt criminal acts; the practices
of Aon are more nebulous. The impact on the industry is far-reaching.
Spitzer forced Marsh to press the ouster of its CEO by refusing to negotiate with
the company and threatening to indict it criminally, an action the company would
have been hard-pressed to survive. With little choice, Marsh CEO Jeffrey
Greenberg resigned and was replaced by Michael Cherkasky, the former CEO of
Kroll Inc., a company Marsh acquired only this year.
Coincidentally — or not — Cherkasky was once Spitzer’s boss in the district
attorney’s office. The show of force used by Spitzer to change not only business
practices but also corporate leadership has many concerned that the tactics are
overreaching, that there is a lack of due process where Spitzer serves as judge,
jury, and executioner.
Executives from American International Group(NYSE: AIG) and ACE Ltd.(NYSE:
ACE), companies run by Greenberg’s father and brother, respectively, apparently
pointed to business practices at Marsh when they came under Spitzer’s scrutiny,
which ultimately led to Greenberg’s downfall.
Aon and Marsh control 70% of the insurance company market.
The investigation is widening throughout the industry, as insurers seemingly report
daily they have received subpoenas for documents on how business is conducted
between brokers and insurers. St. Paul Travelers(NYSE: STA) is the latest of
more than two dozen who have received such subpoenas from Spitzer.
Some consumer advocates view Spitzer’s crusade as beneficial, possibly leading to
lower insurance premiums. Even if no widespread collusion or price fixing is
uncovered, companies might reduce premiums simply to avoid the taint of being
associated with scandal. Marsh, Aon, and Willis Group Holdings(NYSE: WSH) have
already said they will stop charging the miscreant contingency fees, which cost
carriers billions of dollars each year.
While that appears good on the surface, premium growth in the commercial
insurance industry was already slowing, meaning policies were being renewed at
lower rates as it was. Moreover, some insurers like St. Paul’s are expecting huge
hits to third-quarter profits from the back-to-back-to-back-to-back hurricanes
that have hit the Southeast in recent months.
The investigation into insurance industry practices has grown beyond the New York
attorney general. Other states, including Minnesota, Connecticut, and California,
have also launched investigations, while federal authorities and the SEC push their
It is a morass that may cause Aon investors to be off with their money
to safer investments….
Aon will likely become the second insurance broker to be sued by New York
Attorney General Eliot Spitzer, analysts said Thursday.
Aon shares have lagged a slight recovery by Marsh & McLennan in recent days,
amid concern that the second-largest insurance broker will face the same bid-rigging and steering charges as its larger rival, or entirely new allegations relating
to so-called tying.
Tying occurs when brokers direct the business of their corporate clients to
insurance companies in return for those insurers using the broker for their own
Axis Capital, a Bermuda-based reinsurer, said late Wednesday that it got a new
subpoena from Spitzer on Oct. 21 as part of an industry-wide investigation into
“Aon is the No. 2, so if Spitzer is going to move on from Marsh they are the
obvious next target,” said Adam Klauber, an analyst at Cochran, Caronia & Co….
“Since retail insurance brokers have consistently used tying as a method of
developing reinsurance brokerage revenues, investigators are going to find
evidence of this with Aon,” said Andy Barile, an industry consultant who founded
his own reinsurance broker in 1977…
On a Friday conference call, Patrick Ryan, Aon’s chairman and chief executive,
refused to comment when an analyst asked him whether Aon engaged in tying.
Leading brokers, such as Marsh & McLennan and Aon, also generate revenue from
insurers that they helped start and own stakes in, Barile said. “When they started
Bermuda reinsurance companies, they would be the reinsurance broker for that
firm as well.”
Aon was one of the leading investors in Endurance Specialty Holdings, a Bermuda-based reinsurer set up after the Sept. 11, 2001 terrorists attacks, and also
acted as its main reinsurance broker, according to an Endurance filing with the
Securities and Exchange Commission in 2002.
“It is possible that certain brokers and intermediaries that compete with Aon will
perceive a conflict of interest in our relationships with Aon,” Endurance said in the
Marsh had a similar relationship with Axis, which it invested in via its MMC Capital
private equity unit.
Axis used Marsh and Guy Carpenter & Co., Marsh’s reinsurance unit, for 38
percent of its gross written premiums in 2002, according to an Axis filing with the
Securities and Exchange Commission.
$ $ $
November 6, 2004
Florida AG Launches Widespread Anti-Trust Probe,
10 Subpoenas Issued
By Dave Kaiser, Insurance Journal
Florida Attorney General Charlie Crist has issued subpoenas seeking documents
and records from 10 firms and anticipates sending six more subpoenas out next
week as insurance industry investigations widen.
Crist is investigating arrangements between insurers and brokers commercial group
accounts for property and casualty insurance, life and health policies. The
investigation stems from a complaint from a Florida resident.
The 10 firms receiving subpoenas are AON, Inc., The Willis Group, Inc., Brown &
Brown, Inc., Arthur J. Gallagher & Company, Acordia, Inc. doing business a
Acordia Southeast, Inc., Heath Lambert Group doing business as Heath
Lambert Maimi, LLC, Hilb Rogal & Hobbs of Vero Beach, Inc, USI Holdings
Corp doing business as USI Insurance Services of Florida, Inc, HUB
Investment Corporation and Marsh & McLennan Companies.
“At this point we are investigating the brokers and insurance companies for
possible violations of anti-competitive activities,” said Crist. “The subpoenas are
part of a larger effort to ascertain whether insurance practices are being
conducted lawfully, with no conflict, with insured citizens’ best interest at the
Crist said there are indications that insurance brokers have improperly steered
business to insurers who pay the brokers the highest fees rather than seeking the
best deals for their customers. There are also indications that companies may
have engaged in bid-rigging.
The alleged practices could be in violation of Florida’s antitrust laws, Chapter 542,
Florida Statutes. Penalties allow fines of $1 million for corporate violations,
$100,000 for individuals and for three times the amount lost due to illegal
Crist said the State Attorney General’s looks forward to working with the task
force established by Tom Gallagher, Florida’s Chief Financial Officer. The Florida
Attorney General is among several state attorney’s general, including New York,
Massachusetts, California, Connecticut and Ohio, that have opened investigations
into insurance industry practices….
The inquiry came three week after New York attorney general Eliot Spitzer filed a
lawsuit against the biggest insurance broker in the US, Marsh & McLennan. He
alleged that the broker was taking kickbacks in return for directing business to
certain firms and was also involved in bid-rigging to set higher costs for
customers. The suit also implicated several other firms.
Since the New York suit was filed, Marsh has fired four executives and suspended
six others. The insurance firm Ace has fired two and suspended three, and two
AIG workers have pleaded guilty to criminal charges in court.
Aon Corp. on Friday said it sold most of its 16 percent stake in insurer Endurance
Specialty Holdings Ltd. to Goldman Sachs Group Inc. for $320.5 million.
Aon, the world’s second-largest insurance brokerage and consulting company, said
it sold 9.8 million Endurance shares Thursday at $32.70 apiece. Endurance shares
closed Thursday at $34.50, and Friday at $33.26.
Goldman Sachs, the New York-based investment bank, will resell the purchased
shares, not keep them in its own portfolio, Endurance Chief Financial Officer
James Kroner said.
Chicago-based Aon, which trails only rival Marsh & McLennan in size, helped found
Bermuda-based Endurance in December 2001 in an attempt to create additional
capacity in the market.
Aon held about 14.2 million shares, or 21 percent, of Endurance as recently as
April, according to a regulatory filing.
Other major holders included Capital Z Financial Services Fund II LP, with 8.5
percent; Perry Corp., with 7.3 percent; and Thomas H. Lee and Texas Pacific
Group, each with 13.4 percent.
Aon still has the rights to purchase another 4.1 million Endurance shares, the
Aon shares closed Friday at $22.26, up 49 cents, or 2.2 percent. The stock is
down about 30 percent since the middle of October, when it was learned that
New York Attorney General Eliot Spitzer is investigating practices at several
large insurance brokers, including Aon.
Aon’s recent revelations of “financial irregularities,” while not in a class
with Enron or WorldCom, have drawn the inevitable wolf pack to the scent of
blood. Late last week two prominent law firms, specializing in class action
recoveries, announced that they had filed lawsuits against the Chicago-based
The Little Rock Arkansas-based firm of Cauley Geller Bowman & Coates, LLP, and
the Law Offices of Leo W. Desmond in West Palm Beach Florida both announced
that they had filed class actions in the United States District Court for the
Northern District of Illinois. The class is defined as persons who purchased Aon
securities between May 4, 1999 and August 6, 2002.
Desmond’s announcement indicated that the case has been brought against “Aon
Corporation, Patrick G. RyanandHarvey N. Medvin,” and stated that,
“It is alleged that defendants violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10(b)(5) promulgated thereunder, by issuing a
series of materially false and misleading statements to the market throughout the
Class Period which statements had the effect of artificially inflating the market
price of the Company’s securities.”
Cauley Geller’s announcement stated that, “The complaint charges Aon
Corporation and certain of its officers and directors with issuing
false and misleading statements concerning its business and
financial condition. Specifically, the complaint alleges that
defendants issued numerous statements and filed quarterly and
annual reports with the SEC which described the Company’s
earnings and financial performance.
The complaint alleges that these statements were materially false and misleading
because they failed to disclose and/or misrepresented the following adverse facts,
among others: (i) that the Company had materially overstated its net income by
$27 million in 1999, by $24 million in 2000 and by $5 million in the first quarter of
2002; (ii) that the Company lacked adequate internal controls and was therefore
unable to ascertain the true financial condition of the Company; and (iii) that as a
result, the value of the Company’s net income and financial results were materially
overstated at all relevant times.”
Neither action has yet been certified as a class action by the court, and Aon has
not yet commented on them, but it’s likely that the company will end up defending
itself, or settling the actions for a significant amount.
Before the trial bar begins howling that they’ve been unfairly described as savage
predators, some balancing is in order. While the regulatory authorities have been
less than successful in curbing the fraud and deception wrought by greedy
corporate officers and their accounting firm lackeys, one non-governmental
institution remains steadfast in its efforts to sanction corporate wrongdoing –
Sure they do it for money and sometimes they target the innocent, but most often
they get it right. The threat of lawsuits from the victims of corporate fraud,
represented by competent counsel, is a far greater inducement to avoid
misbehavior than all the rhetoric coming from Congress, and the feckless posturing
of the current administration.
If they didn’t exist, the U.S. would be far worse off, as most corporate
shenanigans would be swept under the rug, as they are in much of the rest of the
world. Don’t forget, however, that these lawyers are in business to make money,
just like the insurance industry – a fact they too often forget. If given an
opportunity they’ll take it.
That’s why corporate honesty pays more in the long run than trying
to cook the books.– CEB
o o o
May 18, 2004
Chubb Latest to Face N.Y. Probe
of Compensation Pacts
The Insurance Journal
The Chubb Corporation in Warren, N.J. has received a subpoena seeking
information regarding certain compensation agreements between insurance brokers
and Chubb’s insurance companies from the New York Attorney General Eliot
Marsh & McLennan, Willis GroupandAon Corporation previously
confirmed that they have received subpoenas from Spitzer. The subpoenas are
seeking information as part of a preliminary inquiry into compensation agreements
between insurance brokers and insurance companies.
In February, the national, non-profit public policy group Washington Legal
Foundation (WLF), wrote the New York and California attorneys general and
insurance departments asking them to probe “two potentially damaging practices
engaged in by some in the insurance brokerage industry.”
The two practices WLF wants targeted are placement service agreements
(PSAs) and “leveraging” in the insurance brokerage industry. WLF alleges
that these practices present conflicts of interest.
The group maintains that PSAs encourage brokers to steer
customers to insurers that will profit the broker in contingency
fees, but not necessarily benefit the customer.
“This is a troubling trend in the insurance brokerage industry,” said WLF Chairman
and General Counsel Daniel J. Popeo. “Insurance brokers are paid to
advocate for their customers, not themselves.”
WLF likened these agreements to abuses recently uncovered in the mutual fund
industry by the Securities and Exchange Commission.
The practice of “leveraging” or “tying” refers to brokers coercing insurance
companies into using their services to purchase their reinsurance in exchange for
future referrals for their primary insurance business….
o o o
August 18, 2004
Aon and CSC Create Strategic Alliance to
Deliver Human Resources BPO Services
CHICAGO & EL SEGUNDO, Calif.–(BUSINESS WIRE) – Aon Corporation
(NYSE: AOC – News) and Computer Sciences Corporation (NYSE: CSC –
News) announced today that Aon Human Resources Outsourcing (HRO), a
division of Aon Consulting Inc., has formed a strategic alliance with CSC to
develop and deliver human resources business process outsourcing(HR
Under the agreement, CSC will provide information technology (IT) application and
infrastructure outsourcing services to support future HR BPO engagements.
“We are delighted to enter into this agreement with CSC,” said Gary Budzinski,
president, Human Resources Outsourcing, Aon Consulting. “Our clients will no
doubt benefit from the capabilities of both organizations as we team up on future
human resource outsourcing engagements.”…
Aon HRO provides outsourcing services to manage clients’ business processes in
the areas of benefits, compensation, payroll, recruitment, development and
learning, and performance management. The organization provides outsourcing
services to more than 400 organizations, servicing a combined total of more than
3.5 million employees.
Aon Corporation (www.aon.com) is a leading provider of risk management
services, insurance and reinsurance brokerage, human capital and management
consulting, and specialty insurance underwriting. The company employs
approximately 52,000 professionals in its 600 offices in more than 120 countries….
Aon Consulting is among the top global human resources consulting firms, with
2003 revenues of $1.185 billion and 7,500 professionals in 140 offices throughout
Aon Consulting delivers integrated consulting solutions to help clients with
employee benefits, human resources, compensation, communication and
o o o
P&C INSURANCE COMPANY SWITCHES
At an unknown date, Kamehameha Schools controversial captive subsidiary,P&C Insurance Company Inc., jettisoned their captive insurance company
manager Marsh Management Services, Inc., a subsidiary of the world’s
largest insurance broker, Marsh & McLennan, in favor of Aon Risk Services
Companies Inc., a subsidiary of the world’s number two broker, Aon
o o o
October 23, 1999
FOR IMMEDIATE RELEASE:
Jeffrey H. Case Joins Aon Risk Services As
Executive Vice President
Jeffrey H. Case has joined the downtown Honolulu offices of Aon Risk
Services Companies Inc.as executive vice president in charge of
Announcement of Case’s association with the globally active insurance brokerage
and risk management organization was made public today by John D. (Butch)
Beck, president of Aon Risk Services Inc. of Hawaii.
Case graduated from Punahou School, earning a BA degree in economics from
Denison University of Ohio and hisAssociate in Risk Management
(ARM) designation from the Insurance Institute of America.
He was born and raised in Honolulu along with brothers Steve Case, chairman
of America Online, and Daniel H. Case III, chairman of the Bay Area
financial firm, Hambrecht & Quist, and sister Karen Case.
Aon Risk Services Companies Inc. is a subsidiary of Aon Corporation, a
Fortune 500 company with more than 600 offices in 115 countries and 40,000
employees engaged in insurance brokerage, consulting and underwriting services….
o o o
WTC News Briefs
IMPORTANT PEOPLE WHO MAY HAVE CHEATED DEATH
“President Bush’s cousin should have been in the World Trade Centre when it
was attacked. Jim Pierce, managing director of AON Corporations, had arranged a
business conference on the 105th floor of the South Tower where its New York
offices were based. But his group was too large so they decided to move across
the street to the Millenium Hotel. Two hundred AON staff are missing.”
– Ananova, September 18, 2001
“For Mayor Willie Brown, the first signs that something was amiss came late
Monday when he got a call from what he described as his airport security — a full
eight hours before yesterday’s string of terrorist attacks — advising him that
Americans should be cautious about their air travel … Exactly where the call
came from is a bit of a mystery. The mayor would say only that it came from ‘my
security people at the airport.’ Mike McCarron, assistant deputy director at SFO,
said the Federal Aviation Administration ‘routinely’ issues security notices about
possible threats. He said two or three such notices have been received in the past
couple of months, but none in recent days.”
– San Francisco Chronicle, September 12, 2001
o o o
January 7, 2002
Turning to sleepy insurance to jazz up
By Beth Healy, Boston Globe
Forget tech.The hot new deals for deep-pocketed private equity
firms are in the least sexy business on the planet: insurance.
In the wake of Sept. 11, a host of new insurers and reinsurers are opening their
doors, with billions of dollars in backing from existing insurers and big-name
buyout firms, including Boston’s Thomas H. Lee Co. Lee recently has bet $475
million on three Bermuda insurance deals, after a year in which it made only one
investment (in phone book publisher TRW) from its massive $6.1 billion fund.
This is opportunism at its best. The last time new insurers launched was
after Hurricane Andrew struck in 1992. Rates on property-casualty insurance
policies soared following that natural disaster, much as they’ve skyrocketed since
the terrorist attacks. Some customers are seeing renewal rates jump 300 percent
and 400 percent.
And they’re faced with having to buy more coverage, as their sense of risk has
increased and as acts of terror are struck from typical policies. New kinds of
special coverage will be required to guard against losses from terrorism and acts
All this adds up to big new potential revenue streams for at least six —- and
possibly as many as a dozen —- new insurers and reinsurers (firms that pick up
excess liability from other insurers) and their investors. The start-ups are
virtually all based in Bermuda, not for the golf, but for itstax-haven status.
And they are filling a need, industry experts say, with losses sustained by current
insurance players estimated conservatively at $40 billion. The new entrants
figure they can jump in and be competitive because they aren’t grappling with
losses from the latest catastrophe.
“A lot of capital went out of the business with the catastrophe and has to be
replaced,” said Lanny Thorndike, managing director atCentury Capital, a
Boston-based insurance investor.
Because of Sept. 11, he said, “there’s a higher appreciation for
risk,and with that comes higher returns for those who assume the
o o o
August 7, 2002
Aon accounting questioned by SEC,
drops spin off plan
By Bill Rigby
NEW YORK (Reuters) – Aon Corp. (AOC) said on Wednesdayit may have to
restate several years’ earnings after regulators questioned its accounting
The world’s No. 2 insurance broker also put its underwriting unit up for sale,
dropping plans to spin it off.
Aon shares fellas much as34 percent to a seven-year low of $13.95 on
the New York Stock Exchange, as investors recoiled from another firm with
potentially unreliable accounts. They recovered slightly to finish the regular New
York Stock Exchange trading session at $14.77, down $6.43, or 30.3 percent.
Aon stock has fallen more than 55 percent this year.
Aon, second only toMarsh & McLennan Cos. Inc. (MMC) in the
insurance brokerage industry, also said earnings would be lower than forecast as it
struggles to keep costs down.
“(The results) leave us with little confidence that management can accurately
forecast Aon’s results,” Salomon Smith Barney analyst Ron Frank said. “The
outstanding SEC accounting issues, even if they prove benign, will likely hang over
The Securities and Exchange Commission questioned several items in Aon’s
accounts, including the reporting of investment write-downs, the timing of some
costs and a reinsurance recoverable item and the decision not to consolidate
certain special purpose vehicles.
Chicago-based Aon said it may have to restate earnings for the
past three years, if the SEC says it is necessary.
“If (the SEC) thinks additional disclosure is appropriate, we’re going to do it,” Aon
Chief Executive Patrick Ryan told analysts during a two-hour conference call.
“There is not a revenue recognition problem.”
The firm also said it was looking at alternatives — including a sale — for its
underwriting unit, Combined Specialty Group, which it had planned to spin off,
blaming poor stock market conditions.
“We will provide an update when new plans have been finalized,” Ryan said.
The move is a blow for Aon management and investors, who were hoping
to cash in on soaring insurance rates with the spinoff.
Late Wednesday, Moody’s Investors Service cut Aon’s senior unsecured debt
rating one notch to “Baa1,” its third-lowest investment grade, and said it may cut
the rating again.
Aon’s news caps several years of nagging problems for the company, which has
struggled to consolidate its operations and cut costs after a string of
acquisitions in the 1990s. The firm grew rapidly over the decade, becoming
the only serious rival to Marsh, the world’s long-established leading broker.
The firm lost 176 employees in the attacks on the World Trade Center on Sept. 11.
The SEC’s questioning of its accounts suggests that the firm was
aggressive with its profit reports.To remedy the situation, the SEC
demanded that the firm release more information in its financial reports and stop
using EBITDA numbers, which are potentially misleading earnings numbers,
excluding a host of charges….
Aon is waiting to see whether the SEC will demand that it restate earnings in
previous years to more accurately reflect the timing of some costs and charges
and the consolidation of off-balance-sheet deals.
Aon’s problems are more about presentation than hiding figures, Aon’s CEO told
investors and analysts in a conference call.
“We firmly believe that any adjustments made will not affect shareholder equity,”
Ryan said. “I believe they (the SEC) are going to try to help us resolve these
issues, so that we won’t have any concerns.”
BREAK-EVEN FOR QUARTER
The news came as Aon reported it broke even for the second- quarter, compared
with a profit of 11 cents a share a year earlier.
Results were torpedoed by a $36 million charge for losses from an
underwriting agencythat Aon has sued for fraud.
Profits were also cut by a charge to write down investments and an addition to
The New York law firm of Wechsler Harwood Halebian & Feffer announced
that it has filed a class action lawsuit in Federal Court in Illinois on behalf of
shareholders against Aon Corp., following revelations of misstatements in the
company’s earnings reports.
The news follows two similar actions filed last week by law firms in Arkansas and
Florida (See IJ Website August 19), and contains similar allegations, based on
violations of Rules 10(b) and 20(a) of the Securities and Exchange Act, which
affirm the right of a purchaser of securities to file an action for damages if there
are grounds for affirming that the decision was based on a “material
Aon’s acknowledgment that it overstated earnings, and its agreement
with the Securities and Exchange Commission to restate them for the years 1999-2002, has opened the world’s second largest insurance broker up to a series of
such civil suits….
o o o
September 13, 2002
Bernstein Liebhard & Lifshitz, LLP Announces
Class Action Lawsuit Commenced Against Aon
NEW YORK, NY–(INTERNET WIRE)–Sep 13, 2002 — A securities class action
lawsuit was commenced on behalf of all persons who purchased or acquired Aon
Corporation (NYSE: AOC – News) (“Aon” or the “Company”) securities between
May 4, 1999 to August 6, 2002, inclusive (the “Class Period”)….
The action is pending in the United States District Court for the Northern
District of Illinois, Eastern Division. The complaint alleges that throughout the
Class Period the Company issued a series of materially false and misleading
statements regarding the Aon’s earnings and financial performance….
On August 7, 2002, the company shocked the investing community when it
announced, among other things, that the Securities and Exchange Commission
(“SEC”) had been investigating its financial results and was questioning many
aspects of the Company’s financial statements. Aon also stated that, if the SEC
required, it will have to restate its earnings for the past three years and reduce
its net income by the numbers stated above.
Following this announcement, shares of Aon fell over 30% to close at $14.77 per
o o o
P&C INSURANCE COMPANY SWITCHES
At another unknown date, Kamehameha Schools’ controversial captive
subsidiary, P&C Insurance Company Inc., parted ways with Aon.
It is also unknown at this time WHO their new captive manager might be.
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