Patrick Neary was 'not alarmed' when told about Sean Quinn's CFDs in Anglo
THE former CEO of the Financial Regulator said that he was "not alarmed" when businessman Sean Quinn told him he had contracts for difference (CFDs) in the former Anglo Irish Bank, a court has heard.
Patrick Neary, former CEO of the Irish Financial Services Regulatory Suthority (IFSRA), said that he took Mr Quinn "at his word" during a January 2008 meeting that his [Quinn's] CFD position was small despite market rumours that had been in circulation since the Autumn of 2007 that Mr Quinn held a large stake in the bank.
"I had to believe what Mr Quinn told me, I had no other source [of information] at that time," Mr Neary has told the trial of three former Anglo executives.
This afternoon Mr Neary said that from market rumours in 2007, he had no information - until March 21st, 2008 - about the extent of businessman Sean Quinn's stake in the former Anglo Irish Bank.
Mr Neary said that it occurred to him a long time after he had an unscheduled meeting with Mr Quinn in January 2008 that he "reflected back" on the whole issue in relation to Mr Quinn's position which had been built up using contracts for difference (CFDs).
"I kept my opinions to myself as it would be conjecture and hypothesis," Mr Neary told Patrick Gageby SC, who is representing former Anglo director Pat Whelan.
Mr Neary is giving evidence in the trial of three former Anglo Irish Bank directors accused of allowing the bank to illegally provide loans used to fund the acquisition of the shares in the bank.
The three accused men are Sean FitzPatrick (65), from Greystones, Co Wicklow; William McAteer (63), of Rathgar in Dublin; and Patrick Whelan (51), of Malahide, Co Dublin.
They are charged with 16 counts each of providing unlawful financial assistance to 16 individuals in July 2008 to buy shares in Anglo Irish Bank.
The 16 are members of the Quinn family plus the Maple 10, a group of 10 former large-scale Anglo Irish Bank customers.
The three men have denied all the charges.
Mr Whelan also denies being privy to the fraudulent alteration of loan facility letters to seven individuals in October 2008.
Mr Neary said that he "failed to make any connection" between a visit to his office by former Anglo CEO David Drumm in the Autumn of 2007 and an "unannounced visit" by Mr Quinn to Mr Neary's office in January 2008.
The meeting between the two men was very brief and lasted between 15 and 20 minutes.
Mr Neary said it was "very much an informal conversation" and that he could not point to anything he [Neary] said to Mr Quinn.
"It was very much a one sided conversation," said Mr Neary, who could not recall any question he asked of Mr Quinn on that day.
Mr Neary said that Mr Quinn was entitled to hold CFDs if he wanted to.
And the now retired regulator said he did not ask Mr Quinn directly about his CFD position, because these were his private investments.
The trial has heard that Mr Quinn told Mr Neary at that meeting that he held CFDs in Anglo.
"I don't think it raised any alarm with me when he told me it [the CFD holding in Anglo] was a very small position," said Mr Neary adding that he took Mr Quinn at his word.
"I did not ask Mr Quinn the size of his CFD position" Mr Neary confirmed, adding that he did not ask him in February 2008 when, the court heard, Mr Quinn was "siphoning money out in one form or another" from his insurance company.
Mr Neary told Patrick Gageby SC, representing former Anglo director Pat Whelan, that he could not recall phoning Mr Drumm in the first week of March 2008 when the bank's CEO and senior personnel were on a roadshow in the Middle East in an attempt to secure investors.
"I don't recall the conversation," said Mr Neary who said he only became aware of the extent of Mr Quinn's CFD position on Good Friday, March 21st 2008.
Last Thursday Mr Neary told the trial of three former Anglo executives that had no concerns about Anglo Irish Bank in March 2008, less than a year before it had to be rescued from collapse.
He told the court he had no concerns at the time about Anglo – even after its share price plunged.
The trial continues.