The October 2004 case was thrown out about two years later by a federal judge in Connecticut who ruled that the pension funds had missed the statute of limitations and that the case was filed late (See Hartford Contingent Commission Suit Dismissed ).
Plaintiffs were the Alaska Laborers Employers Retirement Fund and the Communication Workers of America employees pension plan.The pension plans sued The Hartford and its executives, claiming investors acquired the stock at artificially inflated prices due to the firm’s “omissions, misrepresentations, and fraudulent concealment regarding kickbacks, bid rigging and price manipulation schemes engaged in by insurers and brokers,” Reuters reported.
The trial court judge ruled that the plaintiffs could have started their legal fight by July 2001 since public documents should have suggested to investors that The Hartford was likely to be one of the insurance companies under investigation at the time for the kickbacks known as “contingent commissions.”
Appellate judges disagreed. “We disagree with the District Court’s conclusion that Appellants were on inquiry notice of their claims against The Hartford by July 25, 2001,” said the ruling by the 2 nd U.S. Circuit Court of Appeals.
New York and Connecticut state prosecutors investigated the arrangements between insurers and brokers that were prevalent before October 2004, according to the Reuters report. Insurance brokers would receive payments from insurers for steering business their way (See Spitzer Takes On Contingent Commissions ).
The appellate decision is available here .
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