Greenberg son 'to stand down at Marsh'

Jeffrey Greenberg, the chief executive of Marsh & McLennan, the insurance broker accused of rigging the market to make inappropriate fees from customers, was yesterday expected to step down after it emerged that company directors were considering forcing a change of leadership.

Jeffrey Greenberg, the chief executive of Marsh & McLennan, the insurance broker accused of rigging the market to make inappropriate fees from customers, was yesterday expected to step down after it emerged that company directors were considering forcing a change of leadership.

A group of independent directors is understood to have held talks with the office of Eliot Spitzer, New York's attorney general, over the possibility of asking Mr Greenberg to resign in an attempt to settle the dispute.

Mr Spitzer launched a lawsuit against Marsh last Thursday, accusing the world's largest insurance broker of orchestrating a scheme to manipulate customers into taking out the most lucrative deals for the broker and its insurance partners. Since then, Marsh's shares have plunged by almost 50 per cent.

Marsh has suspended four employees, including William Gilman, a star broker who used to earn millions of dollars of fees for the company by arranging insurance for corporate clients which included IBM.

Marsh would not comment yesterday. It is understood that Marsh's 10 external directors held talks for most of Thursday to discuss the crisis. Their thoughts may have been focused by Mr Spitzer's statement that the current senior management of Marsh "is not a leadership I will negotiate with".

Mr Greenberg may be particularly vulnerable because his spell in the top job at Marsh has coincided with a number of scandals to hit the company.

Its fund management arm, Putnam Investments, was last year the first money manager to be charged by US regulators with carrying out controversial trades known as market timing, which disadvantages ordinary investors. Another Marsh subsidiary, Mercer Human Resource Consulting, was entangled in the row between the New York Stock Exchange and its former chairman, Dick Grasso, over his multimillion-dollar pay package. Mercer was forced to admit it had not fully informed the NYSE board about the sum Mr Grasso could take home.

Mr Greenberg is the son of Maurice "Hank" Greenberg, the head of the insurer American International Group, which is also named in the suit. The elder Mr Greenberg denied that there had been collusion between the two.