Aon's stock closed down 30 percent on Aug. 7, the day of the announcement, at $14.77 a share, off $6.43 a share.

The broader first-half picture was brighter for Aon. For the first half, revenues rose 13 percent to $4.2 billion, while net income soared 117 percent to $104 million.

However, "the second quarter bottom line results were the worst in Aon's history due to certain unusual items, compressed operating margins, and lower investment income," Patrick G. Ryan, Aon's chairman and chief executive officer, said in a statement?points he reiterated in an investor's conference.

He said the brokerage firm has taken steps to improve performance, including management changes.

On May 30, Aon said it expected to incur "an expense" related to losses from an alleged fraud and breach of contract by National Program Services, Inc., a managing general agent. Aon reported that the actual expense, reported in the second quarter, was determined to be $36 million.

Aon also noted that the U.S. Securities and Exchange Commission "is in discussions" with the firm regarding some of its financial statements. Aon said that while the two have not yet reached an agreement, the firm has determined that "certain non-cash, other-than-temporary losses should have been recorded in prior periods."

If the SEC does decide Aon must restate its earnings, the broker said it would be looking at a reduction in prior earnings of $27 million for 1999, $24 million for 2000, and $5 million for the first quarter of 2002.

Mr. Ryan said the restatement would not affect shareholder's equity. The ongoing discussions with the SEC, he said, "is not a revenue recognition problem."

Aon Chief Financial Officer Harvey Medvin added that there is no dispute with the SEC. He said the two are working to clear up technical aspects of the brokerage's reporting.

Turning to plans to spin-off its underwriting subsidiary, Combined Insurance, into a separate company, Aon said that because of the current adverse climate in raising equity, it is now changing gears.

The broker said it is looking to either sell all or part of Combined Specialty, or combine a sale with a spinoff of a portion of the company. Mr. Ryan said an update on Aon's plans would be provided once they are finalized.

Mr. Ryan said he expects "significantly" improved results for the remainder of this year and into next year. He said the firm's year-end results are expected to exceed $1.80 per share.

Mr. Ryan said that he and Mr. Medvin would provide certification of Aon's financial report, as requested by the SEC of certain U.S. corporations by Aug. 14.