Regulation

Former Lyonnais Chairman Under Fire

Excluded from an out-of-court settlement, Jean Peyrelevade is contesting U.S. sanctions.
Ed ZwirnFebruary 23, 2004

The former chairman of Crédit Lyonnais is fighting charges that he lied to the U.S. Federal Reserve regarding the French bank’s acquisition of failed U.S. insurer Executive Life, according to the Financial Times.

Jean Peyrelevade, who served as Lyonnais chairman from 1993 until his resignation in October, has appealed against the criminal charges of making false declarations about the acquisition of Executive Life in 1991 by a Lyonnais subsidiary. At the time, reported the Associated Press, U.S. law prohibited banks from owning insurance companies.

Peyrelevade was among a “handful” of French businessmen left out of a $770 million out-of-court settlement of the case between the French government, Lyonnais, and U.S. prosecutors in December, according to the FT.

Sanctions that would be imposed by the Fed include a fine of $500,000, a prohibition against working for a bank in the United States, and a three-year ban on entering the country. Two weeks ago Dominique Bazy, his former deputy at Lyonnais, pleaded guilty on similar charges, reported the AP. Bazy paid a $250,000 fine, agreed to five years’ probation and a three-year ban from the country, and was escorted to Los Angeles International Airport to board a plane for France.

Peyrelevade has also called for a parliamentary inquiry into the French government’s handling of the scandal. He claims President Jacques Chirac left him at the mercy of U.S. prosecutors while intervening to protect his friend François Pinault, whose family holding company bought Executive Life from Credit Lyonnais. The FT also noted that several high-profile French businessmen, including Peyrelevade and Pinault, still face billion-dollar civil suits due to go to trial in February 2005.