Anglo fraud probe could result in first market abuse case
TWO years into the banking crisis and the garda inquiry into irregularities at Anglo Irish Bank continues to trundle on.
Fraud squad detectives are investigating alleged financial irregularities at Anglo, assisted by the Office of the Director of Corporate Enforcement (ODCE), which is investigating alleged company law breaches.
In particular, the investigators are probing:
- The €7.45bn in back-to-back deposits between Anglo and Irish Life and Permanent.
- The €450m loan scheme to the so-called 'Maple 10', the golden circle of 10 investors who bought bank shares to buy out Sean Quinn's shareholdings in an apparent share support scheme.
- Directors' loans at Anglo.
Many of the lines of the inquiry, if they bear fruit, could lead to prosecutions under the EU's market abuse directive (MAD).
Under both the Companies Act and MAD, it is an offence to take part in transactions that give false or misleading signals as to the supply of, demand for or price of financial instruments.
It is also an offence to collaborate on the price of one or several financial instruments at an abnormal or artificial level, unless the reasons for so doing are legitimate or conform to accepted market practices.
There has never been a successful prosecution for insider trading in the 10-year history of the ODCE, and MAD is untested in Irish law.
Gardai are expected to send a file to the DPP by the end of the year.