Updated from Nov. 5
New York Attorney General Eliot Spitzer's appetite for ferreting out potential corporate malfeasance shows no signs of waning.
disclosed late Thursday that the New York prosecutor is investigating a big sale of stock by one of its executives. The insurer says it's recently learned that Spitzer is investigating the timing of the sale of 217,074 shares by Thomas Marra, president and chief operating officer of the firm's Hartford Life subsidiary.
Marra sold the block of stock on Sept. 21, his first sale of the year, for net proceeds of $5.36 million. Trouble was, Marra sold the shares four days after Spitzer's office served a subpoena on the Hartford seeking documents in connection with an industrywide inquiry into allegations of kickbacks and price fixing in the insurance business.
It's a violation of federal securities laws for a corporate insider to sell stock if he has knowledge of nonpublic information that could affect the company's earnings or share price.
Hartford first publicly disclosed the receipt of that subpoena on Oct. 15, in the aftermath of Spitzer filing civil fraud charges against
Marsh & McClennan
, the nation's biggest insurer broker. The Hartford was one of four insurers implicated but not charged in the complaint, which alleged that Marsh orchestrated a scheme to steer business to a group of insurers in return for millions of dollars in lucrative fees.
No other corporate insider at the Hartford has sold stock since the subpoena was served on Sept. 17.
The subpoena in question actually is the second one Spitzer's office has served on the Hartford. The company says it received the first subpoena in June.
Shares of Hartford have bounced around since mid-September, trading around $64 on Sept. 21 and falling to as low as $53.29 in the early days of the scandal. The insurer's shares have since recovered some, and were trading Friday around $61.43.
An official in Spitzer's office wouldn't comment on the stock inquiry. A Hartford spokesman say the insurance firm is confident that Marra acted appropriately.
But the company, in a corporate filing, said Marra has done nothing wrong, and wasn't aware of the subpoena when he sold his shares.
"The company has determined that Mr. Marra complied with the company's applicable internal trading procedures and has found no indication that Mr. Marra was aware of the additional subpoenas at the time of the sale,'' according to the filing.