2005-2-24
I'm Gwen Outen with the VOA Special English Economics Report.
Financial news sometimes has words that seem out of place. Take a
word like "disgorgement." It has a few different uses, but all
describe much the same thing. For example, your stomach might
disgorge some bad food you just ate. Trains disgorge passengers. In
the business world, companies and individuals sometimes have to
disgorge money.
The insurance broker Marsh and McLennan recently agreed to give
eight hundred fifty million dollars back to its customers. The New
York state attorney general, Eliot Spitzer, negotiated the deal.
Mister Spitzer accused Marsh of directing buyers to insurance
companies from which it had received payments.
He said Marsh at times created the appearance of competition when
there was none, so buyers ended up paying more for policies. As part
of the deal, Marsh and McLennan apologized and agreed to change its
way of doing business to avoid conflicts of interest.
Another case brought by Mister Spitzer involves Richard Grasso,
the former chairman of the New York Stock Exchange. Mister Grasso
resigned in two thousand three over public criticism of his pay.
Mister Spitzer wants the former chairman to return most of the one
hundred forty million dollars he received.
Mister Spitzer notes a report written for the exchange by a
former government lawyer. That report became public this month. It
says Mister Grasso had unfairly influenced and misled the officials
who supervised his pay. And it says his pay was unreasonable. Mister
Grasso disagrees.
Another disgorgement case in the news involves a civil action by
the government against major cigarette makers. The Justice
Department brought the case in nineteen ninety-nine.
The government says tobacco companies including Philip Morris,
part of the Altria Group, cooperated for illegal gain. It says they
tried to hide the dangers of their products, and marketed to
children. The government is seeking two hundred eighty thousand
million dollars.
Earlier this month, a federal appeals court in Washington, D.C.,
ruled against the government. The court said the law used in this
case does not require disgorgement of illegally received money.
The cigarette makers now argue that other measures sought by the
government are in conflict with that ruling. The government can
appeal the ruling.
This VOA Special English Economics Report was written by Mario
Ritter. I'm Gwen Outen.