Michael Cherkasky is expected to restore confidence in Marsh & McLennan (MMC) amid allegations of bid-rigging and anti-competitive practices, the board of directors said.
Already share prices, which dropped by 40% after the New York attorney general announced the civil lawsuit, have risen 9.5% to $28.94 following Cherkasky's appointment.
The move by MMC's board of directors to put Cherkasky at the helm signaled its determination to resolve issues with Eliot Spitzer, it said.
Cherkasky and Spitzer have had a working relationship that spans two decades.
Cherkasky was once Spitzer's boss at the district attorney office.
He left to work with Kroll, where he was appointed chief executive in 2001.
The company was brought by MMC earlier this year. Shortly after Spitzer announced his investigation, Cherkasky was appointed as head of its brokerage arm, Marsh.
More changes are in the pipeline at MMC. It said “significant reforms in the business model” would be announced today.
