A prediction of a settlement...

It is very predictable that several months from now, there will be a settlement of the MetLife securities fraud case described below in the August 22, 2005 posting.
In that settlement, MetLife will not admit any wrongdoing. There will be no punitive damages. Some small fraction of the economic loss that the MetLife participating policyholders suffered due to the fraud will be put into a settlement fund. This amount will be tax deductible by MetLife...so on a before tax basis but even more so...on a after tax basis...this form of white collar crime pays and pays well.

Naturally, the next mutual insurer to demutualize will fine tune their demutualization plan based upon lessons learned from the MetLife settlement.

Some advice to the next mutual insurer seeking to victimize it owners: It is still highly profitable to defraud participating policyholders and divert equity to unjustly enrich investment bankers and insiders. However, experience says...tweak the disclosure documents and defer the buy back of treasury stock so it is not so obvious that capital was not needed.

It should go without saying that the class action attorneys will make out like bandits.