THE EXECUTIVE LIFE / CREDIT LYONNAIS SCANDAL looks likely to go to court:

US prosecutors said they would pursue a criminal probe into French bank Credit Lyonnais’ purchase of US insurer Executive Life and ruled out fresh settlement talks with France.

“Further discussions at this time would be unproductive and further delay could prejudice our investigation,” US Attorney’s spokesman Thom Mrozek said.

“Accordingly, we will now push forward toward a conclusion of our investigation. We expect there will be further announcements concerning this matter in the near future,” he said.

The move by exasperated US prosecutors could have dramatic consequences for the French Government, Credit Lyonnais and other French parties in the scandal as it opens the way for criminal charges to be filed against them.

Criminal charges that would lead to a long, complex and embarrassing trial or – more likely – to a plea bargain that could result in formally state-owned Credit Lyonnais losing its precious US banking licence.

Want to bet that some people who were all for the International Criminal Court will start talking about the importance of sovereignty and the likelihood that international prosecutions might be politically motivated?

And why is this story getting so little attention in the American media? It seems like a big deal to me, with significant implications. There’s more background here and here.