The class action suit, by a group of MMC participants, alleges 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 the stock.
US District Judge Shirley Wohl Kram of the US District Court for the Southern District of New York rejected most of MMC’s motions, but accepted the demand to dismiss all counts seeking monetary relief under the Employee Retirement Income Security Act (ERISA) Section 502(a)(3), asserting that “appropriate equitable relief” did not extend to legal damages.
She also dismissed claims by the plaintiffs that the company was liable for equitable relief to the participants even if it were not deemed a fiduciary.
New York Attorney General Eliot Spitzer accused the company in October 2004 of steering its clients to insurers with which it had lucrative payoff agreements and of soliciting rigged bids for insurance contracts (See Spitzer Takes On Contingent Commissions ).
In January 2005, the company agreed to set up a $850-million fund to compensate its clients (See MMC Settles ‘Shameful’ Bid-Rigging Case).