Commentary

Tim Quast
Traders Magazine Online News

We're All HFTs Now

In this guest commentary, author Tim Quast looks back at the history of HFT and how the market has evolved to where many firms now fit the definition of high-frequency trader.

Traders Poll

Are you in favor of a pilot program and examination of the rebate system by the SEC?




Free Site Registration

January 1, 2000

Jury Finds NASD's Zarb Misled Super Bowl Hero

By Staff Reports

Philip J. McConkey was awarded $10 million in damages last month by a jury that found that Frank G. Zarb, chairman of the National Association of Securities Dealers, lied to him about the sale of an insurance company that he had chaired.

The ex-Giant, who is best known for making the winning play in the 1987 Superbowl against Denver, had sued Zarb and the Chicago-based insurance company, the Aon Corporation, for $10 million.

McConkey removed Zarb as a defendant before the trial began. McConkey is now reunited - sort of - with Zarb. He is a consultant to the investment banking group and sales trading unit at Gerard Klauer Mattison, an NASD member firm in New York.

Deception

At the two-week trial before an Essex County, N.J. jury, McConkey charged Zarb, the former chairman and chief executive of Alexander & Alexander Services, an insurance brokerage firm, with deceiving him about the merger of Alexander & Alexander with Aon. The six-member jury awarded the former pro-football player $5 million in punitive damages, $3 million for lost wages, and $2 million for emotional distress. Aon plans to appeal the verdict.

Like many retired sports superstars, McConkey traded in his uniform for a business suit and became a successful sales executive. He served as vice president of the Ross & Company Insurance in Fairfield, N.J., where he built up a substantial client base.

Alexander & Alexander recruited McConkey in 1995. According to McConkey, Zarb made misleading

statements to induce him to leave his insurance job and join Alexander & Alexander. McConkey told the jury that he had heard rumors that Alexander & Alexander would be acquired by Aon. He wanted to be assured by Zarb that the merger would not go through before he left Ross & Company. He testified that Zarb told him that the rumors were "unfounded" and that Alexander & Alexander was "the predator, not the prey."

Zarb testified that he had met several times with Aon's chairman, Patrick G. Ryan, and discussed possible "business combinations." He said that "these were musings" and "none of it did get very serious." McConkey left his insurance job in May 1996 and started working for Alexander & Alexander. Seven months later, Aon announced it was buying the insurance brokerage firm for $1.23 billion. When McConkey first heard the news, he told the jury that "I felt as if I had gotten a helmet, full speed, in the stomach." He was fired from Aon in March 1997.

A spokesman for Zarb at the NASD said, "We're disappointed. At no time was McConkey misled."