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Dublin: 5 °C Saturday 29 February, 2020

Column: Criminal investigations into Anglo Irish Bank are taking too long - and I should know

Former trader Nick Leeson, who spent six and a half years in jail for bringing down Barings Bank, says we can’t afford to delay prosecutions of financial crime.

Nick Leeson

I REMAIN AMAZED by the pace of the investigations into the goings-on at Anglo Irish Bank.

The troubles at Anglo surfaced for the majority of us in September 2008. Criminal investigations, we are told, started in February 2009. I have absolutely no doubt that those in the worlds of Irish banking and politics had a good idea of what was about to unfurl a good degree sooner. There would have been meeting after meeting discussing how bad the situation was becoming until eventually a decision was taken to guarantee bank deposits.

Those decisions were all taken very quickly, and some would argue that they were taken far too hastily. What is absolutely astounding is the way that everything other than the gravity of the economic situation has slowed to an absolute snail’s pace since.

The 12th National Annual Prosecutors Conference took place at Dublin Castle over the weekend.  The Director of Public Prosecutions defended delays into the investigation of dealings at Anglo Irish Bank.

The DPP said that evidence in the case remains to be taken from “important witnesses”. Why?  I could list at least one hundred cases of financial white-collar crime that has been investigated, prosecuted and seen those accused either fined or sent to jail in the same period. In the last few days a former NASDAQ executive pleaded guilty to insider trading as part of an investigation led by federal prosecutors, along with the Securities and Exchange Commission and the Financial Industry Regulatory Authority.  Last week whilst I was in London, the City papers carried daily stories of those brought to trial for similar episodes.

Whilst Justice Minister Alan Shatter has insisted that the investigation into Anglo Irish Bank remains an “absolute priority”, very few of us believe him. We seem to be experiencing a process of delay, delay, delay.

Once more you have to ask yourself why? The process of manipulation, misrepresentation and fraud that went on at Anglo Irish Bank is fairly crude in its process, very easy to see and equally simple to understand. No need for wire-taps, undercover surveillance or lengthy investigations so I am astounded that prosecutions are unlikely to be made until next year.

This isn’t borne out of any personal sense of injustice because I went to jail. I very correctly was sentenced to six and a half years in prison for my actions, which likewise weren’t difficult to comprehend.

The inactivity and delay reeks of a cover-up! The longer we delay, the longer we postpone the realisation of how negligent we were in the regulation of the banks and outing those who were complicit in the cover-up of an insolvent bank.

I’ve been the subject of four separate investigations myself. The CAD in Singapore, the Board of Banking Supervision in the UK, the Singaporean Investigators and the Serious Fraud Squad in England. All were poor. The Serious Fraud Squad spent two weeks taking evidence whilst I was in Germany and whilst the two police officers were very good at their job, the accountant who had been seconded to the investigation just couldn’t grasp it and was a fool. I eventually went back to Singapore, stood trial on what can only be described as specimen charges and pleaded guilty. Confronted by the evidence, as with the most recent case of the NASDAQ official, those accused of financial white collar crime usually plead guilty.

There will be many different cases to surface after this investigation. Some will hopefully explore the multiple conflicts of interest that existed in the bank’s dealings with its private investors. Many people lost large sums of money investing in property funds that bought properties from or with clients of the bank. Many of those clients were obviously in serious trouble at the time of the investment and may well have been insolvent. Those investigations may take a little longer.

In September 2008, a sum of money was transferred from one Irish financial institution to another with one purpose: to misrepresent the status of Anglo Irish Bank’s financial situation and capital adequacy, to provide liquidity, and to all sense and purposes to hide the fact that the bank was technically insolvent. This is fraud – false accounting by any use of the language. This was discussed, ruminated over at a very senior banking level and possibly political level. Those who discussed and initiated this action are guilty of false accounting and deliberately misrepresenting the position of the bank.

A number of individuals were lent money by Anglo Irish Bank to purchase shares in Anglo Irish Bank.  We can’t call it insider trading because everyone lost money but it is a very crude example of market manipulation. Shares were purchased past this date and many unsuspecting investors were duped into purchasing shares and ultimately lost every cent they invested. The purpose of the loans was known, it is illegal and those initiating those loans are guilty. The people who accepted those loans and made the share purchases will argue that they were coerced or bullied into the action. That may well be the case but let their defence lawyers make that case in a court of law.

If evidence is not forthcoming from certain individuals, surely they are perverting the course of justice. If they are now based overseas, seek their extradition. As time passes by and hopefully these people are brought to trial I can already foresee the answer to many of the questions that will be asked: “I can’t remember.” Don’t give them that opportunity!

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