This content is from: Corner Office

Why Peyrelevade quit

As the former head of French banking giant Crédit Lyonnais, Jean Peyrelevade is undeniably a VIP, and his Rolodex bulges with names from a long career in finance. In late September he joined Toulouse & Associés, a Parisian M&A boutique, as a partner.

"I'm not just another retired VIP with a Rolodex," insists Jean Peyrelevade. As the former head of French banking giant Crédit Lyonnais, the 64-year-old is undeniably a VIP, and his Rolodex bulges with names from a long career in finance. But he is assuredly not retired: In late September he joined Toulouse & Associés, a Parisian M&A boutique, as a partner.

Peyrelevade had always expected to do something in investment banking eventually, but not at a firm with only a dozen employees. As a senior French Treasury official, he was recruited to rescue state-owned Lyonnais after its near-collapse in 1993. That mission accomplished, he sold the bank in December 2002 to rival Crédit Agricole for E19.5 billion ($24.8 billion). Peyrelevade hoped that as his reward he'd be put in charge of Agricole's 15,000-person investment banking operation.

Instead, he found himself indicted. In July 2003 the U.S. charged that Lyonnais had committed fraud when it purchased failed California insurer Executive Life in 1991; the bank had allegedly used a front company to get around a prohibition against foreign financial firms buying U.S. insurers. Although the deal took place two years before Peyrelevade joined the bank, he was accused of stonewalling investigators.

He resigned from Agricole in October 2003, just a couple of months before the French government and Lyonnais and its allies in the deal resolved most charges with a $772 million payment to the U.S. Peyrelevade was not covered by the settlement, and the U.S. soon issued a still-standing indictment accusing him of false statements to the Fed, the U.S. Attorney and the FBI. The Fed said it would seek $500,000 in civil penalties from Peyrelevade and moved to ban him from U.S. banking for allegedly concealing Lyonnais's ownership of the insurer. He denies the charges and is appealing the Fed's and U.S. Attorney's actions.

As difficult as his legal problems are, Peyrelevade says the "political infighting at Agricole" over responsibilities at the combined institution was an even bigger inducement to leave.

"Executive Life remains an enormous burden for me," the former Lyonnais chief says. "It's intolerable knowing that one is innocent."

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