Accounting body plans four more Anglo tribunals
Former top bankers may suffer disciplinary action while EY faces public hearing into Anglo Irish Bank audits
After expelling David Drumm from the professional body yesterday, Chartered Accountants Ireland is moving ahead with four more disciplinary processes stemming from the collapse of Anglo Irish Bank.
Dates for public hearings have not been set, but at least one more case is expected to conclude this year.
Disciplinary hearings recommended by a former Comptroller and Auditor General
had been delayed for a decade at the request of the Office of the Director of Public Prosecutions, as a series of criminal trials stemming from the Anglo collapse made their way through the courts. The last criminal case - Mr Drumm's - ended just under a year ago.
The disciplinary action follows 2009 investigations for what was then the Chartered Accountants Regulatory Board by former senior civil servant John Purcell.
He found "prima facie cases of liability to disciplinary action" in respect of four individual members of the professional body: Mr Drumm, former Anglo chairman Seán Fitzpatrick, the bank's former finance director Willie McAteer, and former Irish Life & Permanent (IL&P) finance director Peter Fitzpatrick, who were all qualified chartered accountants.
Global accounting giant EY also now faces the prospect of public professional disciplinary hearings.
The Purcell investigation made preliminary rather than definitive findings, but argued there was prima facie against EY in relation to three specific events at Anglo - including a claimed failure to refer in an audit report to the so-called back-to-back deals in September 2008 between IL&P and Anglo Irish Bank.
Mr Drumm's guilty plea in his criminal trial effectively made the outcome of his disciplinary case a one-way bet; the bar to criminal prosecution is higher than for professional disciplinary action.
Former Anglo finance director Mr McAteer also has a criminal record. He was sentenced to three-and-a-half years in jail for conspiracy to defraud back in 2016. Other cases may be more complex.
Seán Fitzpatrick has been cleared of all charges brought against him arising out of Anglo Irish Bank's collapse. Peter Fitzpatrick was also found not guilty following a trial.
EY has previously said it would "vigorously defend" its €1m-a-year audit work for Anglo, arguing that under Irish law, it was the responsibility of the bank and its then directors to ensure that financial statements met legal and accounting standards.
The firm also faces a planned civil action by the liquidators of IBRC, who are suing EY for its alleged "repeated failure" to uncover alleged "highly unusual and improper" loans.
Mr Drumm's was the last of the Anglo Irish Bank trials, and his was the first of the Chartered Accountants Ireland disciplinary actions.
Following a short public hearing yesterday, the disciplinary tribunal of Chartered Accountants Ireland found Mr Drumm "had acted in a manner which brought discredit to [himself] and the profession of accountancy", and expelled the former Anglo chief executive from the professional body.
Mr Drumm, who is already serving a six-year prison sentence, did not contest the tribunal's case, which focused on his role in relation to the so-called Maple 10 series of loans made by Anglo Irish Bank in 2008 to 10 of its biggest borrowers to buy shares from the family of Sean Quinn; and the back-to-back loans between Anglo and the former IL&P.
Mr Drumm accepted the tribunal findings and waived his right to appeal. He also agreed to contribute €15,000 towards the costs of the disciplinary action.
That is half the maximum fine available, but was accepted by the disciplinary tribunal after representations regarding Mr Drumm's own financial position.