Anglo probe searching for evidence of market abuse
Garda fraud squad detectives and the Office of the Director of Corporate Enforcement have been investigating matters at Anglo for the past 25 months and began submitting files to the DPP late last year.
- What are the key events being investigated at Anglo?
-- The movement of more than €7bn between Anglo and Irish Life & Permanent in a "back-to-back" deposit arrangement for the benefit of Anglo at the end of the financial year in 2008.
-- The involvement of the so-called 'Maple 10' group of investors, who bought Anglo shares using money from the bank.
-- The temporary transfer of up to €100m of former Anglo chairman Sean FitzPatrick's loans off the books of Anglo Irish Bank.
-- Loans made to other directors.
- What laws could have been breached?
-- Market manipulation and abuse: Market abuse consists of insider dealing and market manipulation, where privileged information is used when buying or selling shares, which in turn leads to investors being disadvantaged by others.
-- Insider trading: Identical penalties to market abuse, insider dealing bans using knowledge that is not in the public domain to buy, recommend or induce the purchase of shares.
As with market abuse, insider trading -- which undermines market integrity and shatters investor confidence -- is difficult to prosecute.
-- Criminal Justice (Theft and Fraud Offences) Act 2001: An extremely broad law that encompasses a wide range of general financial frauds including false accounting, as well as making gains or causing loss by deception.
Deception could include concealing relevant information from potential buyers of shares or placing misleading information in a bank's accounts.
Fines are unlimited and deception can attract a prison term of up to five years. Fines for false accounting are unlimited and can attract a prison term of up to 10 years.
-- Company law: Ireland's company laws have offences including giving financial assistance for the purchase of shares; failing to keep proper books of account; fraudulent trading; failing to declare a relevant interest; and failing to maintain a register of director's transactions.