Lord Lang hit by legal bombshell over Marsh & McLennan fraud

Lord Lang of Monkton, the president of the Board of Trade in the last Conservative government, is being sued for his role as a director of Marsh & McLennan, the US insurance broker accused of orchestrating a massive fraud against customers.

Lord Lang of Monkton, the president of the Board of Trade in the last Conservative government, is being sued for his role as a director of Marsh & McLennan, the US insurance broker accused of orchestrating a massive fraud against customers.

Lord Lang is one of a number of directors accused of breaching their fiduciary duty to Marsh's shareholders in a class action organised by the New York law firm, Goodkind Labaton Rudoff & Sucharow.

The move is a blow for Lord Lang, who has kept a low profile since Marsh was last month accused by New York's combative Attorney General, Eliot Spitzer, of manipulating insurance bids to collect inappropriate fees. The action increases pressure on Lord Lang to step down from Marsh's board.

The situation recalls howLord Wakeham, another former Tory cabinet minister, was forced to resign as chairman of the Press Complaints Commission because he was on the board of Enron, the collapsed energy giant. A string of US class action specialists are preparing cases against Marsh, which could leave it facing liabilities of hundreds of millions of dollars.

Goodkind's case alleges Marsh forced its employees to use their retirement savings programmes to invest heavily in its shares. Employees face heavy losses since the company's stock plunged after Mr Spitzer's allegations.

"Marsh's 'bid rigging' schemes were fraudulent and illegal, and have opened the company up to massive civil and criminal liability. For these reasons, the defendants knew or should have known that Marsh stock was an imprudent investment alternative for the [retirement] plans," the claim says.

Another high-profile figure burnt by his business activities is Sir Christopher Meyer, the former British ambassador to the US and now head of the PCC. Sir Christopher sat on the board of Riggs, the Washington-based bank for the well heeled, which has been fined a record $25m (£13m) for failing to comply with anti-money laundering laws.