A federal judge on May 9 said a jury has voted on seven of eight verdict forms in a case against a group of French investors in connection with the illegal takeover of failed insurer Executive Life.
U.S. District Court Judge A. Howard Matz asked attorneys for both sides to return Tuesday when he will determine whether jurors will be able to resolve the remaining questions posed in the case.
In 1999, the California Department of Insurance sued the French investors, claiming they had conspired all along to effectively give Credit Lyonnais – then owned by the French government – control over all of Executive Life’s assets, thereby violating California law at the time prohibiting foreign governments from owning insurers in the state.
The lawsuit also accused French billionaire Francois Pinault and his holding company, Artemis SA, of later buying Executive Life’s insurance business and some of the bonds as part of a scheme to help Credit Lyonnais and the other investors shield themselves from an investigation by U.S. authorities.
Most of the original parties named as defendants, including Credit Lyonnais, reached a $600 million out of court settlement in February. MAAF Assurances declined to offer a defense in the case. Pinault and his company were the remaining defendants.
California Insurance Commissioner John Garamendi released a statement on the outcome of the case, saying:
“Today is a promising day for policyholders of the former Executive Life Insurance Company. The jury, in our civil lawsuit against Artemis S.A., has returned a verdict that vindicates our longstanding position.
“It found that Artemis, Credit Lyonnais and others engaged in a conspiracy to fraudulently obtain assets from the Executive Life estate. It also fully rejected the defense’s argument that the Insurance Commissioner had knowledge of this scheme before it was uncovered.
“I thank the jury for its commitment and careful consideration of the facts. Its decision affirms the existence of the fraud that allowed the unlawful sale of Executive Life and its assets to the French group.
“The battle we have waged in this case is one to recoup money that rightfully belongs to the policyholders of Executive Life. To date, attorneys representing the Department of Insurance have secured $715 million in recoveries through settlements with Credit Lyonnais, CDR Enterprises, Aurora and others.
“As we have said from the very beginning of this case, the French investors who bought Executive Life and its assets did so illegally by hiding the true controlling ownership of their group. They lied under penalty of perjury and in the name of greed. As we look forward to the opportunity to prove our damages, I reiterate my belief that no one should be allowed to profit from fraud.”
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