Executive Life Action Network Notes Opportunity to Recover Losses|
The Insurance Journal
May 12, 2005
The Executive Life Action Network, (http://www.executivelife.org/ ), an activist group of former Executive Life Insurance Co. policyholders, said Thursday the recent jury verdict that found the holding company controlled by billionaire Francois Pinault guilty of conspiracy provides an excellent opportunity to recover billions of dollars in policyholder losses.
"The jury found that Artemis SA joined and participated in a conspiracy to obtain the ELIC assets by fraud and that this conspiracy harmed the ELIC estate. This is a crucial ruling for policyholders," said Maureen Marr, an ELAN co-founder and long-time policyholder activist. "According to the jury instructions written by Judge Matz, Artemis is now liable for all acts committed as part of the conspiracy, whether the acts occurred before or after that defendant joined the conspiracy."
Marr pointed out that Artemis was found to be part of a conspiracy involving several admitted felons -- including Credit Lyonnais and MAAF Assurances S.A.
"According to court filings, the potential damages attributable to all of the involved parties could be in the billions of dollars not including any punitive damages awarded by the jury. Artemis should be on the hook for all of that," she said.
Artemis, the major holding company for Pinault's investment empire, owns the Christie's auction house, Chateau Latour and controls Pinault Printemps Redoute, another Pinault holding company with stakes in major fashion houses including Gucci and Yves Saint Laurent.
"While the jury did not find sufficient grounds to convict Mr. Pinault, we are extremely encouraged by the verdict overall which clearly showed that the jury was convinced that Artemis had willfully and recklessly participated in a scheme that harmed policyholders," said Vince Watson, another ELAN co-founder and father of Katie, an annuitant who suffered brain damage as an infant due to hospital error.
Marr said that policyholders have launched a public campaign to encourage California Insurance Commissioner John Garamendi to push for a full recovery of policyholder losses.
"The previously announced settlement with Credit Lyonnais was a travesty. Now we have a very broad reaching conviction. The Commissioner should be pushing for a recovery in the billions of dollars. Anything less is unjust, unwarranted and totally unacceptable," Marr said.
Marr also said that ELAN is exploring the possibility of having the federal fines and penalties that were awarded to the Department of Justice and Federal Reserve in 2003 transferred to the ELIC estate.
"Right now, there are over $200 million of penalties just sitting in federal coffers as a result of this case. It seems only right that the funds that were recovered from the prosecution of the ELIC fraud should be used to recoup policyholders' $4.5 billion of losses," she added.