French Approval Awaited on Executive Life Settlement

The United States has approved a deal with France to settle a long-running probe into failed insurer Executive Life and is waiting for the French government to do the same, a spokesman for the U.S. attorney’s office in Los Angeles said Monday.

France had until Monday to settle accusations by U.S. prosecutors that Credit Lyonnais and other defendants illegally bought assets including a valuable junk bond portfolio from Executive Life in 1991, short-changing policyholders. At the time, the French government owned Credit Lyonnais.

“We believe we have a final agreement,” said U.S. attorney’s office spokesman Thom Mrozek. “We are waiting to hear from the French government and whether it will approve the settlement.”

France backed out of a preliminary $585-million settlement in September after U.S. prosecutors then tried to target French executives including Francois Pinault and Jean Peyrelevade. Mrozek declined to provide details on the latest agreement but said it did not involve Pinault’s holding company Artemis.

A failure to reach a pact could chill ties between the United States and France and could lead Credit Lyonnais, bought by bigger Credit Agricole this summer, to lose its lucrative U.S. banking license.