New York Attorney General Eliot L. Spitzer filed a civil suit against insurance broker Marsh & McLennan, accusing it of cheating corporate customers by rigging bids and demanding kickbacks from insurers. The company fired its top broker and said it would no longer seek "contingent commissions." The suit was the first salvo in an industry investigation that will turn now to large insurers such as American International Group, Hartford Financial and Munich-American, all of which Spitzer has accused of participating in the scheme.
Calculating Their Options
The accounting industry's standards-setting board delayed by six months implementation of a controversial rule requiring corporations to account for the cost of employee stock options in calculating earnings. The move was sought by high-tech companies, which said they need more time to implement the rules. But critics said the industry will use the time to continue lobbying Congress to block the rules, which will significantly lower their reported earnings or lead them to issue fewer options.
GM Parked Next to Junk
Standard & Poor's lowered General Motors's bond rating to one notch above junk as the company slashed its profit forecast and warned of major job cuts in its money-losing European operations. GM officials blamed health care costs and the impact of rising fuel costs on sales of sport-utility vehicles for disappointing results. In the increasingly crowded European market, where Opel and Saab have lost market share to Asian brands, the company says it may cut as many as 12,000 jobs if it cannot win concessions from unions.
Contractors Seek Review
Two rivals asked the Pentagon to review billions of dollars in contract awards to Boeing after a former Air Force procurement official acknowledged favoring the company in return for jobs for family and friends. Lockheed Martin and BAE Systems cited $6 billion worth of contracts won by Boeing to upgrade electronics on the C-130 transport and to develop a small-diameter bomb. But Boeing said it is unaware of receiving any special considerations from Darlene A. Druyun, who has been sentenced to nine months in jail.
Wal-Mart's Union Battles
Wal-Mart threatened to close a Quebec store -- its only unionized outlet in North America -- if the retailer can't negotiate a "reasonable" contract with its employees. Even without a union contract, Wal-Mart said the store in Jonquiere is losing money, but a union official questioned why the company would have recently opened two other stores in the region if this one was losing money. The union was certified in August after a majority of the store's 150 employees signed union cards. Wal-Mart has more than 200 stores in Canada.