|For immediate release|
The Federal Reserve Board on Thursday announced the issuance of several enforcement actions involving Credit Lyonnais, S.A., a large French bank with several U.S. offices. The actions relate primarily to Credit Lyonnais's participation in the rehabilitation of the Executive Life Insurance Co. of California, which was declared insolvent in 1991.
The Federal Reserve's actions today included:
In addition to the Federal Reserve's actions Thursday, the U. S. Attorney in Los Angeles is announcing that Credit Lyonnais and several other entities and individuals have agreed to plead guilty to specific crimes related to their roles in the Executive Life matter, as well as announcing an indictment against several other individuals involved in the matter, including Peyrelevade. The Federal Reserve Board and the Federal Reserve Bank of New York investigated the matter jointly with the U.S. Attorney's Office. The consent enforcement actions being announced by the Federal Reserve are part of a global accord designed to address both the regulatory and criminal aspects of the Executive Life matter.
The Federal Reserve is also working with the French banking supervisor to take joint action to require Credit Lyonnais and its parent to enhance their overall compliance programs. Completion of the documentation for this action is expected shortly.
The Federal Reserve's consent action against Credit Lyonnais resolves allegations that, beginning in the early 1990s, Credit Lyonnais violated the Bank Holding Company Act by acquiring the company that assumed Executive Life's insurance underwriting business through secret agreements that were concealed from the Federal Reserve. The action also resolves allegations that Credit Lyonnais intentionally misrepresented to the Federal Reserve the extent of its ownership interests in a portfolio of junk bonds that had been acquired from Executive Life as well as its substantial equity investment and other relationships with Artemis, S.A., a French company that subsequently acquired the successor insurance company and junk bond portfolio. In the Board's Order, Credit Lyonnais neither admits nor denies these allegations.
The Notice of Charges issued against Peyrelevade, who became the chief executive officer of Credit Lyonnais after the acquisition of the insurance business, alleges that he took steps to further the alleged violations, engaged in unsafe and unsound practices in not reporting the violations when he learned about them, and made false statements to Federal Reserve investigators about the scope of his knowledge of the secret acquisition.
Copies of the Board's Order against Credit Lyonnais, the Written Agreement with Credit Agricole, and the Notice of Charges against Peyrelevade are attached.
2003 Enforcement actions