(Pictured: Accused man Mr Denis Casey. Photo: Collins)
Every single action by the Financial Regulator was consistent with it approving a seven billion euro deal allegedly designed to mislead the markets, a trial has heard.
Four former executives from Anglo Irish Bank and Irish Life & Permanent (ILP) are accused of conspiring to defraud investors about the true health of Anglo. The trial is now in its closing stages.
Denis Casey (56), from Raheny, Dublin, Peter Fitzpatrick (63) of Convent Lane, Portmarnock, Dublin, John Bowe (52) from Glasnevin, Dublin and Willie McAteer (65) of Greenrath, Tipperary Town, Co. Tipperary have all pleaded not guilty at Dublin Circuit Criminal Court to conspiring together and with others to mislead investors by setting up a €7.2 billion circular transaction scheme between March 1st and September 30th, 2008 to bolster Anglo’s balance sheet.
On day 73 of the trial Michael O’Higgins SC, defending ILP’s former CEO Denis Casey, said that the Financial Regulator was “the policeman of the financial world.”
He said that while the Regulator didn’t sponsor or approve the €7.2bn deal in advance “every single action and inaction post September 30 is 100 per cent consistent with approving. Why was the regulator, why was the policeman, doing that?”
“It is a reflection of extraordinary measures taking place in extraordinary times”.
He said his client was very clear to gardai that he “wouldn’t have touched this transaction with a barge pole if I didn’t think the Financial Regulator was backing it”.
He said that there were two transactions in this case – one that his client and ILP authorised, which was to be risk free and secured, and another which was the one Anglo reported on their balance sheet.
“Anglo weren’t stumbling into these transactions. They wanted them on a particular basis,” counsel said.
He said that it was the case that if the jury acquitted the accused from Anglo it must acquit his client, but added that “very plainly the opposite does not follow”.
In his closing speech on behalf of Mr McAteer, Anglo’s head of finance in 2008, Patrick Gageby SC told the jury that the Anglo/ILP deal took place against the terrible background of the financial meltdown.
He said in this context Anglo and other banks were under intense scrutiny by the Government, the Financial Regulator and the Central Bank.
He said it was beyond doubt to anyone at the top of Anglo, including Mr McAteer, “this transaction was going to be and would become plain knowledge to the Regulator”.
“Was it not apparent to Mr McAteer that the accountancy of this transaction, the fact of it, was all going to be looked at by others,” Mr Gageby said.
He said that his client knew that people in the Regulator’s office would look at the transaction before Anglo published it’s balance sheet. He said these were not lowly clerical people, they were people whose job it is to know about banks and financial regulations.
“It’s inconceivable…that Mr McAteer would be a part of a conspiracy to defraud and so act dishonestly in the knowledge that all of these things were gong to be one run before the entirety of many emanations of the State,” counsel said.
He said that by October, eight weeks before the publication of Anglo’s balance sheet in December which accounted the ILP deal as a customer deposit to Anglo, the Financial Regulator was made aware of the deal “in bare detail”.
“The extent and nature of the disclosure which was inevitable to the Regulator is not consistent with dishonesty,” counsel said.
He said that while the transactions may have been unwise they were not dishonest or criminal.
He said that if Mr McAteer held the view that the transactions were dealt with properly in Anglo’s balance sheet this is not a view consistent with dishonesty and “it would not follow that this was a criminal conspiracy”.
After approximately seven hours, Diarmaid McGuinness SC concluded his closing speech on behalf of Anglo’s former head of capital markets Mr Bowe. He told the jury that Mr Bowe’s CEO at the time, David Drumm, was the driver of the deal with ILP and had set the target of €7.2bn.
“My client’s involvement is no more or no less that that of many of the witnesses. You have no evidence he intended to join a dishonest scheme. You have clear evidence he thought the deposits were lawful,” he said.
Mr McGuinness told the jury that the State’s expert witness, chartered accountant Mark Hunt, had failed to take a number of things into account when he concluded that the Anglo/ILP deal had no commercial or economic substance.
He said that Mr Hunt, who has worked for the UK’s financial conduct authority, had considered as irrelevant the “green jersey agenda” – the State “policy of banks attempting to support each other”.
“I wonder if you could have gotten an Irish accountant to say that,” Mr McGuinness asked.
He said Mr Hunt also failed to consider the long term interests of both parties and the threat to the survival of Anglo as well as the context of the banking crisis at the time.
“They haven’t called anyone from the financial regulator or the Central Bank to offer any insight whatsoever. We haven’t heard a dicky bird from them or from the Department of Finance. I would have thought you might have expected to have somebody in the box,” he told the jury.