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• • 106 Executive Life Fraud Trial Verdict Says French billionaire Francois Pinault did not defraud California Insurance Regulators - Mixed Verdict in Exec Life Fraud Trial
• • May 11, 2005 / A jury reached a split decision Tuesday in the long-running legal battle over the collapse of Executive Life Insurance Co., finding that a company controlled by French billionaire Francois Pinault defrauded California regulators in a scheme to acquire the failed insurer's assets, but clearing Pinault himself of wrongdoing.
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The decision, which came after an eight-week trial and more than 12 full days of deliberation, left open the question of whether damages would be assessed against Pinault's firm, Artemis. The state had been seeking damages of $1 billion.
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U.S. District Judge A. Howard Matz postponed a hearing on the issue until the last week of May at the earliest and urged both sides to settle.
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"It's time to stop the posturing," Matz told attorneys on both sides. "It's time to stop the muscle flexing. I hope you will resolve your differences."
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Los Angeles-based Executive Life was the largest life insurance company in California when it collapsed in 1991 because of steep losses in what had been a $7-billion junk bond portfolio. In an attempt to protect policyholders, state Insurance Commissioner John Garamendi took over the company and sold the assets for $3.25 billion in 1992 to an investor group financed by French banking giant Credit Lyonnais. The investors later sold the assets for a big profit.
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The state Department of Insurance filed suit in 1999, alleging that Credit Lyonnais, owned at the time by the French government, used a series of front companies to acquire the junk bond portfolio and the insurance assets of Executive Life, in violation of a state law that prohibits foreign government entities from owning insurance firms in California.
• •
Specifically, the state's suit alleges that Artemis was created in part by Pinault in 1992 in a scheme to help Credit Lyonnais unload the assets after U.S. officials began asking questions. Pinault, one of the richest people in France, controls a financial empire that includes fashion brands Gucci and Yves Saint Laurent and Christie's auction house.
• •
In its verdict, the jury cleared Pinault of civil charges that he engaged in intentional misrepresentation, concealment or fraud when he acquired some of the assets of Executive Life.
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However, the jury found that Artemis was liable for conspiracy and fraud for its role in the deal.
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The jury deadlocked on the question of whether state regulators, had they known of the scheme, would have sold the assets to another party.
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Reflecting the hybrid nature of the jury's decision, both sides claimed victory.


ByLines: Editors Note

More Articles • Converging News 202005 / TeleCom Buy Outs and Asset Seizure Boom

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Josie Cory
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Yes90 tviNews 106 Executive Life Fraud Trial Verdict Says French billionaire Francois Pinault did not defraud California Insurance Regulators - Mixed Verdict in Exec Life Fraud Trial • / Television International Magazine's Person Of The Week POW 202005 - / NEWS Convergence - 20th Week of 182005 / Feature Story • 106CaliforniavsFrancoisPinault.htm Smart90, s90tv, lookradio, tvimagazine, dv90, vratv, xingtv, Ddiaries, nbs100, Look Radio, Josie Cory, Television With No Borders

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