If FitzPatrick lived in New York, he'd have been arrested
IF Sean FitzPatrick lived in New York, he would already have done the perp walk.
The perp walk is the American slang term for the police practice of parading an arrested suspect in handcuffs before the media. Arrested, released on bail if he's lucky, the assets of this alleged perpetrator -- "the perp" -- would be frozen. His passport seized, FitzPatrick might be contemplating his bankrupt future from the comfort of his home, where -- under house arrest -- his every move would be monitored.
FitzPatrick could be preparing a defence to any number of criminal charges being pursued by the US Department of Justice, assisted by the Securities and Exchange Commission: conspiracy, mail and wire fraud, revenue recognition breaches.
The list is endless. Just ask any US executive ensnared in the post-Enron corporate cleansing crusade who is serving up to 40 years in prison.
Anglo is Ireland's Enron.
The descent of the energy trader shattered investor confidence, devastated corporate morale and left markets reeling.
So too with Anglo, which has brought our banking sector to its knees and led the New York Times to label Ireland as "the wild west of European finance".
What of Ireland's company laws? When was the last time any banker was handcuffed and led to jail for perpetrating a fraud? The answer is never.
What happened when the Supreme Court found last year that former DCC boss Jim Flavin was in possession of insider information when he traded stock?
Insider dealing, said Judge Nial Fennelly, was a fraud on the market, but Flavin's hands had to be prised from the helm of DCC and the only handcuffs that featured in the epic DCC-Fyffes saga were golden ones.
When he stepped down as chairman of Anglo, Sean FitzPatrick insisted that he did nothing illegal. Irish law firms circling angry shareholders in anticipation of quasi-class action lawsuits beg to differ.
Was FitzPatrick guilty of fraud? By any stretch of the imagination, his actions were fraudulent. Sean FitzPatrick acted with intent to deceive.
For eight years he hid colossal loans from shareholders. At a basic moral and corporate level, if not a legal one, he perpetrated a fraud on the shareholders. Would a shareholder have bought shares if he knew director's loans, ie, liabilities, were being concealed? Probably not. Therefore FitzPatrick's actions, if disclosed, may have impacted on Anglo's share price. The market, arguably, was distorted by his deception.
FitzPatrick, who once branded Ireland's lax regulatory regime as "corporate McCarthyism", had a duty to ensure the annual accounts were a true view of Anglo's financial affairs.
What about the remaining members of the board? What knowledge had they of FitzPatrick's warehousing scheme?
What about the auditors, Ernst and Young? Under Irish laws they are not required to "search" for possible offences but they are required to react to information coming into their possession. How did they not know about FitzPatrick's loans?
Ireland's laissez-faire attitude towards corporate malfeasance stands in stark contrast to the zeal of our American cousins.
It is notoriously difficult to prosecute fraud, and our laws and precedents are out of date.
The Government is due to publish a new company law. Its aim is to enhance Ireland's reputation as an attractive place to do business. After Anglo, that's an incredibly big ask.