Compliance December 8, 2009

MMC Settles Stock-Drop Case

Lawyers for participants in Marsh & McLennan Co.'s (MMC) Stock Investment Plan have hammered out a $35-million settlement with the company of allegations it violated the Employee Retirement Income Security Act (ERISA) by continuing to offer company stock as a retirement investment when it was no longer prudent.

Reported by

U.S. District Judge Colleen McMahon of the U.S. District Court for the Southern District of New York has given preliminary approval to the deal and has scheduled a hearing for January 29 to consider a final decision on the settlement of the class-action suit, according to court documents.  Class members were participants or beneficiaries of the Marsh & McLennan Companies, Inc. Stock Investment Plan between July 1, 2000, and January 31, 2005.

The settlement comes in a consolidated case covering a series of participant lawsuits alleging that company officials knew or should have known that the company was engaging in bid rigging and price fixing that artificially inflated the value of its stock. In January 2005, the company agreed to set up a $850-million fund to compensate its clients.

In seeking McMahon’s blessing, lawyers pointed out that the settlement avoids the necessity of litigating a complex financial case.

“The facts and circumstance surrounding the fraudulent business practices at the world’s largest insurance broker, underlying the breach of duty claims in the Complaint, are highly complex and undeniably would be greatly time consuming to litigate further to trial,” the lawyers argued, according to the summary of the settlement. “This Settlement conserves judicial resources and reduces the expense associated with the remaining expert discovery and briefing required to prepare Plaintiffs’ case against Defendants for trial.”

Deals & People December 8, 2009

BofA Merrill Realigns Retirement Executives

Andy Sieg, head of Retirement & Philanthropic Services (RPS) at Bank of America Merrill Lynch, has made retirement leadership changes, including two promotions and one outside hire.

Reported by

Sieg was named head of RPS when Sallie Krawcheck, president of Bank of America Global Wealth & Investment Management (GWIM), announced her leadership team in September (see “BofA Brings in New Heads for Retirement, Wealth Management”).

The firm said Sieg has “realigned his leadership team to help further focus the business on meeting the needs of its personal and institutional clients, and to support strategic growth areas of the business.”

The company announced the following changes:

  • Kevin Crain, formerly head of plan participant solutions, will now serve as head of Institutional Client Relationships, responsible for institutional retirement business development and client relationship management. Crain is also responsible for oversight of legislative and public policy issues pertaining to retirement.
  • Personal Retirement Solutions business will now expand to include plan participant solutions. The unit will be headed by Aimee DeCamillo, who will continue to serve as head of Personal Retirement, responsible for retirement education and planning, IRA products and rollover process, 401(k) plan participant solutions, 529 plans, health savings accounts, retirement income solutions, and channel management.
  • David Roberts has rejoined Bank of America Merrill Lynch as head of Equity Plan Services, responsible for managing the equity plan platform and the executive advisory services program, as well as the non-qualified deferred compensation platform.

The firm said Roberts will partner closely with DeCamillo and other partners in GWIM to drive wealth management relationships within the equity plan business. The move is an effort to strengthen the business’ equity plan platform and infrastructure.

Additional members of Sieg’s leadership team include: Paul Cummings, head of Institutional Investment & Advisory Services; John Furlong, head of Institutional Benefit Plans; Cary Grace, head of Philanthropic Management; Barry Lindenbaum, head of RPS Operations & Technology; and Kabir Sethi, head of Strategy & Institutional Business Office.

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