Spitzer is poised to take his pound of flesh, says Elliot Lane
' As Insurance Times went to press, the night of the long knives was being discussed at the headquarters of Marsh and McLennan Companies (MMC) in New York. The House of Greenberg, with all its Shakespearian connotations, seemed to be on the verge of toppling as MMC's chief executive Jeffrey Greenberg was due to be unceremoniously sacrificed to Eliot Spitzer's followers.
The New York attorney general's investigation has taken such a grip of the industry, no-one knows where it will end. Spitzer has refused to talk to MMC with its present management and so the prodigal son of AIG's Hank Greenberg must go. Jeffrey Greenberg is known in the industry as "God" and internally as "Howard Hughes" due to his virtual zero public appearance. Everyone knows his name and knows he is in control, but like the arch-villian in the film The Usual Suspects, Keyser Soze, no-one really knows what he looks like.
Insiders say that Spitzer's crusade against MMC and other insurance brokers is off the back of the failed case against Putnam Investments. Putnam Investments, the fifth-largest mutual fund in the US, was charged with defrauding its investors by secretly trading funds to make profits for itself. In the end the attorney general failed to get a case and Putman agreed to make restitution to investors and adopt reforms in a partial settlement on securities fraud charges.
While the US operation of Marsh implodes and the shredders go white hot, the UK must sit back and watch. Marsh UK chief executive Bruce Carnegie-Brown has asked City law firm Freshfields to come in and clear its name. The UK arm is in rude health and like Guy Carpenter would like to launch an MBO (or even a number of MBOs) and free itself from its US parent, now the group's albatross.