Trial hears disclosures to regulator not consistent with dishonesty

The extent of disclosures to the Financial Regulator of the €7 billion euro deals at the heart of a conspiracy to defraud trial is not consistent with dishonesty, a jury has heard.

Four former executives from Anglo Irish Bank and Irish Life & Permanent (ILP) are accused of conspiring to mislead investors about the true health Anglo is now in its closing stages.

Willie McAteer (65) of Greenrath, Tipperary Town, Co. Tipperary, Denis Casey (56), from Raheny, Dublin, Peter Fitzpatrick (63) of Convent Lane, Portmarnock, Dublin and John Bowe (52) from Glasnevin, Dublin have all pleaded not guilty at Dublin Circuit Criminal Court to conspiring together and with others to mislead investors by setting up a €7.2 billion circular transaction scheme between March 1st and September 30th, 2008 to bolster Anglo's balance sheet.

After about seven hours, Diarmaid McGuinness SC concluded his closing speech on behalf of Anglo’s former head of capital markets Mr Bowe.

Patrick Gageby SC also concluded his closing speech on behalf of Mr McAteer, Anglo’s head of finance in 2008 by lunchtime on Friday.

Terrible background

He told the jury that the Anglo/ILP deal took place against the terrible background of the financial meltdown. He said in this context Anglo and other banks were under intense scrutiny by the Government, the Financial Regulator and the Central Bank.

He said it was beyond doubt to anyone at the top of Anglo, including Mr McAteer, “this transaction was going to be and would become plain knowledge to the regulator”.

“Was it not apparent to Mr McAteer that the accountancy of this transaction, the fact of it, was all going to be looked at by others?” Mr Gageby said.

He said that his client knew that people in the regulator’s office would look at the transaction before Anglo published its balance sheet. He said these were not lowly clerical people, they were people whose job it is to know about banks and financial regulations.

“It’s inconceivable...that Mr McAteer would be a part of a conspiracy to defraud and so act dishonestly in the knowledge that all of these things were gong to be one run before the entirety of many emanations of the State,” counsel said.

He said that by October, eight weeks before the publication of Anglo’s balance sheet in December which accounted the ILP deal as a customer deposit to Anglo, the Financial Regulator was made aware of the deal “in bare detail”.

“The extent and nature of the disclosure which was inevitable to the Regulator is not consistent with dishonesty,” counsel said.

Unwise

He said that while the transactions may have been unwise they were not dishonest or criminal. He said that if Mr McAteer held the view that the transactions were dealt with properly in Anglo’s balance sheet this is not a view consistent with dishonesty and “it would not follow that this was a criminal conspiracy”.