Posted on 10 Oct 2011
French bank Crédit Lyonnais will pay $150 million to settle a suit filed by the American International Group’s SunAmerica unit over its 1993 investment in a California insurance company that the French bank had illegally acquired.
AIG Retirement Services, formerly SunAmerica, and Crédit Lyonnais, filed a settlement agreement in federal court in Los Angeles.
The AIG unit sued a group of French companies including Crédit Lyonnais in 2005, saying that it was defrauded when it bought a 33 percent stake in the insurer, New California Holdings, because it did not know that the French owners, a group led by MAAF Assurances, were a front for Crédit Lyonnais.
At the time, the French bank could not own an insurer under United States law.
New California is the restructured successor of Executive Life, which was taken over by the state of California after it had become insolvent and was later sold to the MAAF group. France, on behalf of Credit Lyonnais, paid $600 million to settle claims the bank misled regulators by not disclosing it was the true owner of Executive Life.
Credit Agricole SA bought Credit Lyonnais in 2003.