independent

Monday 21 April 2014

Key bankers advised to 'sit tight' over inquiries

A NUMBER of key figures at the centre of the banking scandal have been advised by lawyers to "sit tight" because the State will find it extremely difficult to prove deliberate wrongdoing.

The Irish Independent has learned that some bankers have been advised that the State will face an uphill task in convincing a court there was intent to commit a crime.

Ireland has a weak record on the prosecution of white-collar crimes and complex fraud actions, owing to the high proof thresholds required in the prosecution of such cases.

The key figures have also been advised that prosecution will be made even more difficult if it can be shown that regulatory authorities knew about or supported certain transactions.

There has never been a successful prosecution for insider trading in Ireland and the Markets Abuse Directive, an EU-wide law that regulates insider trading and market manipulation, has never been tested in an Irish court.

Earlier this year the Office of the Director of Corporate Enforcement (ODCE) told the High Court that it could take another two years for prosecutions, if any, to flow from its inquiries into Anglo Irish Bank.

The ODCE has not secured one conviction in its near 10-year history, during which not one white-collar criminal has bee sent to jail.

A garda file on the Anglo Irish Bank/Irish Life & Permanent deposit exchange, the Anglo 10 share-support scheme and the issue of directors' loans has yet to be completed and may not be handed over to the Office of the Director of Public Prosecutions until early next year.

The revelation came as former regulator Patrick Neary refused to comment on claims by former Anglo Irish chief executive David Drumm that he and the Central Bank were aware at all times of key decisions at the bank.

Mr Drumm, who has not been accused of any crime, has filed for bankruptcy in the US over €8m in loans that he cannot repay Anglo. He alleged at the weekend that everything was done with the knowledge of the authorities.

"Every step we took was hand in hand with our own (Financial) Regulator, the Central Bank," Mr Drumm said from his home in Wellesley in eastern Massachusetts. "I acted at all times in the interests of the bank and with the full backing of the regulator."

Former Central Bank governor John Hurley was unavailable for comment yesterday. Mr Neary refused to comment to the Irish Independent when approached outside his home in Dundrum yesterday.

Proof

Both men have been criticised in the report drawn up by Central Bank governor Patrick Honohan, who found their organisations to have been "timid", "excessively deferential" and "accommodating" but no serious investigation has unearthed proof that the bank or regulator were kept fully informed of Anglo's decisions.

Mr Drumm's interview contains an apology of sorts. "At a human level there isn't a day goes by, all day, and sometimes all night, (that) I'm (not) haunted by what we, as a bank, as a management, as the board of the bank, could have done differently to not end up where we ended up," he said.

The banker also reveals that Anglo decided back in 2004 to reduce exposure to Irish property but somehow failed to implement the policy because it was somehow unable to stand back from long-lasting relationships with borrowers.

Mr Drumm, who has an Anglo pension worth more than €5m which cannot be taken away from him, said he was "sick to my stomach" about the suffering in Ireland but still appeared unable to take responsibility for his actions, saying he would only do so when others took responsibility for theirs.

Irish Independent

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