If there wasn't any justification for the probe would the "market" have responded this way?

Insurance Probe Drives Down Stocks
Fri Oct 15, 2004 08:48 PM ET
By Aleksandrs Rozens and Joseph Giannone

NEW YORK (Reuters) - Top U.S. life insurer MetLife Inc. (MET.N: Quote, Profile, Research) said on Friday it had received several subpoenas from New York Attorney General Eliot Spitzer, in a sign that a probe into alleged rigging of bids in exchange for fat fees in the insurance industry is widening.

The disclosure was among a series of developments related to the investigation, which has shaken the entire insurance world and is already triggering changes in the way business is done.

Marsh & McLennan Cos. (MMC.N: Quote, Profile, Research) , which was sued by Spitzer on Thursday for steering unsuspected clients to certain insurers and reaping huge fees as a result, announced on Friday it was replacing the chief executive of its Marsh Inc. insurance brokerage unit. It also said it would suspend a controversial practice that is at the heart of the case.

Investors' fears about the extent of the investigation drove down the shares of insurers and insurance brokers for a second day. Tens of billions of dollars of market value in insurance industry stock has been wiped out since the Spitzer probe was disclosed on Thursday.