Aon Corp. in August revealed that it may have to restate several years' earnings after regulators questioned its accounting practices. The Chicago-based insurance broker also put its underwriting unit up for sale, dropping plans to spin it off.The Securities and Exchange Commission questioned several items in Aon's accounts, including the reporting of investment write-downs, the timing of some costs and a reinsurance recoverable item and the decision not to consolidate certain special purpose vehicles.
Aon executives say the company may have to restate earnings for the past three years, if the SEC says it is necessary.
In August, Moody's Investors Service cut Aon's senior unsecured debt rating one notch to "Baa1," its third-lowest investment grade, and said it may cut the rating again.
Separately, Pomerantz Haudek Block Grossman & Gross LLP filed a class-action lawsuit against Aon and two of the company's senior officers on behalf of investors who purchased or otherwise acquired the securities of Aon during the period from May 4, 1999 through August 6, 2002.
The lawsuit, filed in the United States District Court for the Northern District of Illinois charges that defendants issued false and misleading financial statements and press releases concerning Aon's publicly reported earnings, thereby artificially inflating the market price of Aon securities.
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