MassMutual Faces New Subpoena
Massachusetts Mutual Life Insurance Company is facing several state investigations in the aftermath of its abrupt firing of its chief executive officer.[@@]
The office of Massachusetts Secretary of State William Galvin confirmed Thursday that it sent a subpoena, or official request for information, to MassMutual after MassMutual refused to hand over requested documents.
Massachusetts Attorney General Tom Reilly says he is investigating ousted MassMutual Chief Executive Officer Robert O’Connell in connection with “serious allegations of wrongdoing.”
In a prepared statement, Reilly says he was contacted by representatives of MassMutual, Springfield, Mass., last week. “We conducted a preliminary review of documents they provided and met yesterday with representatives of the company,” Reilly says.
Galvin spokesman Brian McNiff says his department’s investigation concerns civil matters, particularly in the area of securities regulation.
O’Connell was dismissed June 2 by the MassMutual board after serving 7 years as chief executive of the company.
The company also is undergoing its periodic financial examination by the Massachusetts Department of Insurance.
“The primary objective of the examination is solvency issues, but the commissioner has broad powers to look at all aspect of the company’s operations,” says Chris Goetchus, a department spokesman.
Massachusetts Insurance Commissioner Julianne Bowler has been in contact with the attorney general’s office this week, Goetchus says.
The Wall Street Journal reported Friday that a MassMutual board report alleged O’Connell had used unauthorized trading techniques to inflate the value of a supplemental fund set up for his benefit. In addition, the report said O’Connell had bought a company-owned condominium for less than the market price and had interfered with efforts to discipline his son and son-in-law, who work at Mass Mutual.
A spokesman for O’Connell is denying the allegations. “There are definitely 2 sides to this story,” says the spokesman, Richard Nicolazzo. “Mr. O’Connell has said from day 1 that he intends to dispute and challenge the conclusions and actions of the board. Throughout his tenure, he has acted in the best interests of the company and its policyholders consistent with the company’s policies, guidelines and board directives.”
In related news, MassMutual says it is creating an “office of the chief executive officer” that will include the company’s new chief executive, Stuart Reese, along with Roger Crandall, MassMutual’s chief investment officer; Howard Gunton, the chief financial officer; John Murphy, president of the OppenheimerFunds Inc. money management unit; and Matthew Winter, president of the individual insurance group.