Marsh & McLennan Securities Fraud Litigation
Ball Janik LLP is defending Marsh & McLennan Cos., Inc. and Marsh Inc. in a lawsuit brought by the Oregon Public Employees Retirement System (OPERS) under Oregon’s new securities-fraud statute in the wake of the New York Attorney General’s (NYAG) investigation of Marsh, AIG, and many of the largest insurers and brokers in the world. The claim for damages is $10 million. OPERS alleged that Marsh wrongfully failed to disclose revenue from contingent-commission agreements and illegal bid-rigging by some employees. After extensive discovery and related disputes concerning the 14 million pages produced by Marsh in the NYAG litigation (plus additional documents requested by OPERS), Marsh successfully moved for summary judgment on the grounds that the newly-passed Oregon securities statute, as interpreted by OPERS not to require scienter, was unconstitutional under the Commerce Clause, and that plaintiff’s case was fatally defective because it could not show reliance without Oregon’s adoption of the federal “fraud on the market” doctrine. The trial court agreed with Marsh that adopting the federal “fraud on the market” doctrine would be a “radical departure” under Oregon law, and the trial court agreed that a scienter-less state securities law would run afoul of the Commerce Clause.
The trial court dismissed the entire $10 million case in June 2008. OPERS has appealed and Ball Janik is continuing to represent Marsh as appellate counsel. On May 20, 2010, James T. McDermott presented the oral argument on behalf of Marsh. The Oregon Court of Appeals recently adopted Marsh's arguments and affirmed the trial court. The case is now pending in the Oregon Supreme Court.
James T. McDermott and Dwain M. Clifford (litigation partners) are lead counsel for Marsh & McLennan Cos.