A class action lawsuit was filed against Marsh & McLennan Companies on behalf of participants and beneficiaries of the Marsh & McLennan Companies Stock Investment Plan, the law firm Scott + Scott, LLC said in a press release on Wednesday.

The lawsuit, filed in U.S. District Court for the Southern District of New York, alleges that defendants Marsh & McLennan Companies and other plan fiduciaries breached their fiduciary duties under the Employment Retirement Income Security Act.

According to the Complaint, the alleged conduct was particularly damaging for Plan participants and beneficiaries because, under the Marsh & McLennan Companies Stock Investment Plan, matching contributions were made in MMC Stock and MMC Stock was offered as an investment alternative in the 401(k) component of the Plan. As a result of Defendants’ fiduciary breaches, the Plan has suffered substantial losses, resulting in the depletion of hundreds of millions of dollars of the retirement savings and anticipated retirement income of the Plan’s participants, attorneys for the plaintiffs said.

Under ERISA, the breaching fiduciaries are obligated to restore to the Plan the losses resulting from their fiduciary breaches.

Eliot Spitzer, the New York Attorney General, sued Marsh & McLennan on Oct. 14 for allegedly rigging bids and accepting improper commissions in return for steering business to favored insurers. In the aftermath of the lawsuit, Marsh & McLennan announced that it would lay off 3,000 employees, or 5 percent of its work force. Earlier this week, the Company also announced that, in the third quarter of 2004, net income dropped to $21 million from the $357 million of a year earlier, a 94% decline.

“The drop was due to the creation of a reserve fund for potential litigation and to the permanent loss of certain fee and commission income,” Plaintiff’s attorneys said.

(via Business Wire)