NEW YORK (Bloomberg) — Two former Marsh & McLennan Cos. executives were found guilty of restraint of trade and acquitted of 20 other charges after the first bid-rigging trial in a New York probe of anticompetitive insurance sales practices.

William Gilman and Edward McNenney were the first of seven former executives at the world's largest insurance brokerage to face trial for fraud in the investigation. They were accused by the New York Attorney General's Office of fixing prices to steer business to insurers that paid their company hidden fees. The remaining five defendants are awaiting trial.

New York State Supreme Court Justice James Yates, who heard the case in Manhattan without a jury, found the two men guilty of the sole count of monopoly or restraint of trade under New York's antitrust statutes today after a 10-month trial. They face as much as four years in prison when they are sentenced April 30.

"For ultimately all of the counts, the judge saw the undeniable truth," said Robert Cleary, a lawyer for Gilman, adding he would appeal the lone conviction. "The verdict on that count is fatally flawed."

Yates didn't explain his verdict. Twenty-one former employees of Marsh & McLennan, American International Group Inc. and three other companies have pleaded guilty to felonies or misdemeanours since former state Attorney General Eliot Spitzer initiated the inquiry in 2004.

"We are gratified that the court found the defendants guilty of felony bid-rigging," said Jeffrey Lerner, a spokesman for New York Attorney General Andrew Cuomo.

New York-based Marsh & McLennan lost almost half its market value and ousted former chief executive officer Jeffrey Greenberg before settling a related civil lawsuit filed by Spitzer in 2005. The brokerage settled for $850 million over accusations that it rigged bids and took kickbacks from insurers.

Gilman, 64, formerly Marsh's executive marketing director and managing director, and McNenney, the ex-global placement director and managing director, worked in the Excess Casualty Unit of Marsh Global Broking, a subsidiary of Marsh Inc.

Between November 1998 and September 2004, the defendants allegedly defrauded clients including Intel Corp., Vivendi Universal SA and Fortune Brands Inc., according to a 2005 indictment.

The two men were accused of falsely representing bids to customers by predetermining winners and soliciting losing quotes from other insurers. Gilman enforced the system, threatening to take business away from insurers if they didn't inflate their quotes, according to Spitzer's suit.

"Competitive bidding prices bring down prices for the client," assistant attorney general Elizabeth Nochlin said in closing arguments. "These defendants, these insurance brokers, didn't want that competition to occur."

Stephen Neal, a lawyer for McNenney, said in closing arguments on February 13 that the prosecutors didn't prove that his client intended to harm any Marsh client.

"The prosecutors failed to prove, let alone by a reasonable doubt, that Mr. McNenney engaged in any challenged conduct," Neal said. "The evidence is overwhelmingly inconsistent with the existence of any unified, overarching scheme as alleged by the prosecution."

Neal said on Friday that he was "pleased" with the verdict and would appeal the conviction on the sole count. Yates acquitted the defendants of scheme to defraud in the first degree, nine counts of grand larceny in the second degree and 10 counts of grand larceny in the third degree.