Banks & Finance

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Custom House Capital: Victims still waiting for justice

January 30, 2012 in Banks & Finance, Corporate, Regulatory Agencies by Anthony | 1 comment

I see the victims of the Custom House Capital fraud have been given until March 23 to apply for compensation.

Victims can claim up to a maximum of €20,000 which, of course, is mere chickenfeed in comparison to what has been lost.

Some victims have lost everything including their homes and any means of providing for themselves in retirement.

One woman lost close to half a million so twenty grand, if she gets that, will mean little.

Meanwhile, the fraudsters responsible are still walking the streets enjoying the same rights and freedoms as law-abiding citizens.

The Garda Fraud Squad is, allegedly, investigating the matter but victims would be strongly advised not to hold their breaths.

What we seem to be witnessing here is the usual response to alleged white-collar crime in Ireland.

The matter is shunted into a sideline allowing so called regulators; police and politicians to wash their hands of responsibility while the victims are left to suffer the consequences.

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Central Bank to stage new soap opera

January 30, 2012 in Banks & Finance, Regulatory Agencies, The State by Anthony | 1 comment

The Central Bank, in an obvious attempt to cheer us all up, is to stage its very own soap opera.

Next week, three bank bosses who were on boards in the lead up to the 2008 financial crisis, must convince the Central Bank’s Fitness and Probity panel that they are capable of running their respective banks.

It’s all a great joke, of course. None of these gentlemen will suffer in any way for their gross incompetence.

But if, by some miracle, they’re told to pack their bags, those bags will be filled with a couple of million courtesy of the taxpayer.

Next week’s farce is only the first episode in this new soap opera.

According to sources it could be several months before the authorities decide whether there are grounds for a full investigation.

And if, by some miracle, there is an investigation, it will be many years before it comes to any conclusion.

And if, by some miracle, these gentlemen are found guilty of some wrong doing their case will be handed over to the ODCE to be considered for another few years.

And if, by some miracle, the ODCE actually manages, for the first time, to complete an investigation into allegations of serious white-collar crime a file will be sent to the DPP for consideration – for an indeterminate number of years.

And if, by some miracle, anybody can remember what the case was about, and if all the files are not mysteriously lost, and, indeed, if any of the bankers are still alive, they may face prosecution and be thrown in jail.

Ah no, I’m only joking about that last bit.

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Never mind the €1.25bn Anglo Irish payment; what about Fingleton’s watch?

January 25, 2012 in Banks & Finance by Anthony | 3 comments

The payment of €1.25bn to Anglo Irish Bank bondholders today is just the latest chapter in the ignominious collapse of our gloriously corrupt republic.

There will, no doubt, be a great deal of handwringing, breast-beating and whatever you’re having yourself before the day is out.

Personally, I’m going to mark the occasion by focusing on a much more important issue – Michael Fingleton’s watch.

Last September, dedicated sleuth and chairman of Anglo Irish Bank, Alan Dukes, dramatically declared to the world that he was on the verge of retrieving Fingleton’s watch for the greater good of the Irish taxpayer.

Watch this space…there will be one or two things coming out of that in the next couple of days.

Also hot on the trail of the dastardly Fingleton and his infamous watch was Duke’s deputy sheriff and chief executive of Anglo, Mike Aynsley.

We have not yet had a response to our request for the return of the watch said the intrepid detective but, in a stern warning to the wayward Fingleton, declared:

The bank won’t be infinitely patient.

Four months on and I’m still watching that (Dukes) space, still waiting for Aynsley’s patience to run out.

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Quinn family claims are outrageous

January 17, 2012 in Banks & Finance, Corporate, Regulatory Agencies by Anthony | 1 comment

Patricia Quinn and her children are claiming that the huge loans made to them by Anglo Irish Bank are invalid because they are tainted with illegality.

Obviously these claims are untrue.

I’m sure that if state authorities were aware of even the slightest hint of wrongdoing by those responsible for running Anglo there would be hell to pay.

It’s been three years now since Anglo got into trouble and not a single official has been charged with any wrongdoing

So obviously these outrageous claims are nothing more than sour grapes by the Quinn family.

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Ireland’s banana republic reputation spreads to Australia

December 9, 2011 in Banks & Finance, Financial Regulator, Government, Regulatory Agencies by Anthony | 1 comment

Ireland’s banana republic reputation, when it comes to financial regulation, has spread to Australia.

It was 2007 when The New York Times dubbed Dublin the wild west of European finance.

This was the opening line by Emma Alberici, European correspondent for the Australian current affairs programme AM (Read and listen to Alberici’s report here).

Alberici was reporting on the latest failure of Ireland’s so called Financial Regulator to enforce the law.

Jonathan Sugarman was the head of risk management at the Dublin office of Italy’s UniCredit bank which runs a $50 billion operation in Ireland.

Sugarman was forced to resign after his chief executive consistently asked him to break the law.

Clearly, Sugarman’s boss was confident that he operated in a jurisdiction where financial law enforcement does not exist.

The Central Bank told the Australian broadcaster that it was still examining the allegations first brought to it by Sugarman four years ago.

Here’s what Sugarman had to say:

I left the bank’s offices, I walked down to the regulator’s office, I wasn’t going to leave it to anyone to deliver it but myself, and nothing happens.

That is like walking in to a police station with a knife with blood on it and saying I’ve just killed someone and you expect the police to say well where’s the body? Where’s the person? What have you done? And they just say, fine, just don’t do it again.

And that left me dumbfounded.

The bottom line is that the Irish Financial Regulator does not actually regulate, it does not enforce the law.

For many years now it has, effectively, operated a policy of telling white collar criminals to pay back any money robbed and not to do it again.

This irresponsible attitude has resulted in massive hardship and loss for countless thousands of Irish citizens.

The policy has also played a major role in the loss of Ireland’s financial sovereignty and the impoverishment of generations of Irish citizens to come.

Copy to:
Financial Regulator

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Anglo: Another arrest, another couple of billion

December 9, 2011 in Banks & Finance, Government by Anthony | 3 comments

Sean Fitzpatrick has been arrested again.

Irish citizens must be due to pay another couple of billion to Anglo

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Dail question on CHC scandal

December 8, 2011 in Banks & Finance, Financial Regulator, Government, Regulatory Agencies by Anthony | No comments

My local representative, Fine Gael TD David Stanton, has replied to my request for a Dail question on the CHC scandal.

Dear Anthony,

Thank you for your email below. Just to let you know I tabled the below Dail question to the Minister for Finance today, so should have a response next Wednesday evening. I will pass it on to you as soon as I receive it.

Best regards

David Stanton TD

Written Question from David Stanton TD

To ask the Minister for Finance if he has received a report from the Financial Regulator in 2009 regarding an investigation into a company (details supplied); if it is intended to publish same and will he make a statement on the matter.

(Details: Customs House Capital)

(See below for my letter to deputy Stanton).

6th December 2011

Dear Mr. Stanton,

In early 2009, after receiving information from an unknown source, the Financial Regulator carried out an investigation into a wealth management company called Customs House Capital (CHC).

Apart from some supervisory and organisational issues the Financial Regulator found no significant problems with the company. The Financial Regulator adopted the following strategy – I quote.

Following the identification of these supervisory concerns, related to compliance and organisational issues, the strategy was to encourage CHC to identify and engage with potential buyers for the firm, which would be the best outcome to protect client investments and funds.

CHC took up this advice and sold its non-property assets to a company called Appian Asset Management.

Within a very short time Appian Asset Management discovered that CHC had been engaged in major fraud and immediately informed the Financial Regulator.

In 2010 the Financial Regulator carried out yet another investigation into CHC and found that major fraud had indeed been going on within the company.

Full details of the 2010 investigation are available to the public on the Financial Regulator’s website.

I requested details of the (alleged) 2009 investigation and was informed that this report was not available to the general public under secrecy laws. (Section 33AK of the Central Bank Act, 1942 (as amended).

The conduct and conclusions of the 2009 report are absolutely crucial in determining whether the Financial Regulator is, as claimed by this government and its predecessor, truly reformed and fit for purpose.

I request that you ask the following questions in Dail Eireann.

Why is the 2010 report legally available while the 2009 report on the same company, on the same matter, is deemed to be a state secret?

Why did the (alleged) 2009 investigation by the Financial Regulator fail to detect the major fraud that was going on right under the investigator’s noses?

Has the Financial Regulator taken any action to determine why its staff failed to detect what a company (which was not conducting an investigation) detected almost immediately on examining the books of CHC?

Why has there been no arrests arising from this matter? It is a verifiable fact that similar cases, in functional jurisdictions, quickly resulted in arrests, charges and prosecutions.

The following is a quote on the matter from High Court Judge Mr. Justice Hogan delivered on 28th October 2011.

In fact, the report describes a long litany of general misfeasance and wrong-doing, ranging from the systematic deliberate misuse of funds, gross impropriety, corporate misfeasance and false accounting to trading in a fraudulent manner.

Yours etc.

Anthony Sheridan

This request has also been forwarded to a representative of every political party.

Copy to:
Financial Regulator

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Financial Regulation: Secrecy and obfuscation still the weapons of choice

December 8, 2011 in Banks & Finance, Corporate, Financial Regulator, Government, Regulatory Agencies by Anthony | No comments

The Custom House Capital (CHC) false accounting and fraudulent trading scandal is a very serious matter but, unfortunately, not a rare event in Ireland.

What should be of much greater concern to the people of Ireland is how this scandal has exposed the lie that financial regulation has been reformed and is now fit for purpose.

Soviet style secrecy and obfuscation are still the principal weapons employed by the Financial Regulator to prevent even the most basic information concerning its activities being made public.

The Financial Regulator claims it carried out an investigation into CHC in 2009 and found nothing more than some supervisory, compliance and organisational issues.

It was only when an outside agent became involved, in this case a company that had bought a section of CHCs business, that the fraud was uncovered.

The failure of the Financial Regulator to detect major fraud within a company that it was, allegedly, investigating raises some very serious questions.

In my opinion there are four possible reasons for this failure in regulation.

1. There was no investigation in the first place and the Regulator is now lying to cover up its failure.

2. There was an old style, pre financial catastrophe investigation. This would involve much drinking of coffee, hours of friendly chat with an occasional glance at some minor aspect of the business under investigation and the compilation of a report that found everything was just hunky dory.

3. Financial Regulator staff are so incompetent that they failed to uncover what Appian Asset Management immediately uncovered on taking over CHCs books.

4. There was a serious investigation and serious fraud was discovered but a cover-up strategy was adopted by the Financial Regulator.

This last possibility is most likely to be the truth.

Irish citizens know, to their great cost, that it is quite common for so called regulators to cover up fraud and criminality within the financial sector.

The DIRT and Ansbacher frauds are just two of the more serious examples of this strategy.

The crucial point arising from this particular scandal is not just that white collar crime is still tolerated by state authorities but that the same old strategies of secrecy and obfuscation are being employed to, effectively, protect the guilty.

Copy to:
Financial Regulator

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CHC fraud: Liam O’Reilly’s evidence

December 7, 2011 in Banks & Finance, Corporate, Government, Regulatory Agencies by Anthony | No comments

Liam O’Reilly was the Property Fund Administrator with Custom House Capital when the company was engaged in false accounting and fraudulent trading.

I have been assured by the Financial Regulator that this is not the same Liam O’Reilly who once held the position of Financial Regulator.

Here’s some of Mr. O’Reilly’s evidence.

Liam O’Reilly – Property Fund Administration – 3pm on Monday 18 July.

4.2 Sworn testimony to Inspectors.

The witnesses called by the Inspectors were asked to describe the Destiny structure, comment on whether they were aware of a process whereby funds from one sub-trust may have been used to fund the expenses of another or others and asked who authorised such payments..

Further on in the evidence of Mr. Liam O’Reilly

Q. Right. Okay. The problem being some are under water.

A. Exactly. And the money isn’t there. It has been very, very difficult the last few months

Q. All right. Okay. So in the context of I suppose the clients statements in relation to — well, the areas that you’re familiar with, Liam, are — would it be true to say that some of those clients, their unit position there is not really reflecting the true position if — if the pooled accounts were pulled apart?

A. I sign off on them and I stand over it, you know. They’re 100 percent accurate. The issue is, if that client, you know, wanted to sell his property in the morning, and maybe there was a cash balance of 100,000 in one of these accounts, it may be difficult in getting that out.

4.4 Conclusions

The Inspectors are of the view that the practice of using available cash balances on the pooled cash accounts to pay invoices and other expenses of individual sub-trusts, particularly those of the larger commercial/syndicated trusts, was pervasive within CHC for a considerable time.

Unit holders in the affected sub-trusts would not be aware that this was taking place having regard to the pooled nature of the cash accounts and the fact that in any statement issued to them by CHC their holdings in the trusts would be reflected as units held.

As each trust would appear to be a separate legal entity, the problems in resolving this issue will be most acute in relation to those trusts which a) in aggregate owe money to the pooled accounts and other trusts, b) have little cash holdings in their own right and c) have poor or negative cash flows.

A thorough analysis of each trust’s transactions will be required.

Based on the testimony received and the forensic examination the practice would appear to have existed for some time within CHC.

The scale of the problem appears to have increased to some extent in 2011.

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Taoiseach’s speech: The usual waffle and denial

December 5, 2011 in Banks & Finance, Body Politic, Government, The State by Anthony | 2 comments

Because Enda Kenny’s address to the nation was little more than the usual collection of meaningless platitudes it is easy to analyse.

Point One: As a nation we are living beyond our means (Borrowed from the criminal politician Haughey).

Point Two: You, ordinary citizens, are not to blame. (But you will pay the price for the political and financial corruption that has destroyed the country).

Point Three: We must ensure this never happens again. (This is standard waffle which is usually followed up with – we must move on, the past is another country; anger is not a policy etc., etc.).

The key point in the Taoiseach’s speech was, however – who he blamed for the catastrophe?

If, as he had already stated, the Irish people weren’t to blame – then who?

Let me be clear – Ireland supports stronger economic governance throughout Europe, and particularly in the Eurozone.

In fact, the Irish people are paying the price now for the absence of such rules in the past.

So there you have it. It is now almost universally believed within Ireland that Europe is the cause of our complete failure as a state.

No mention of political corruption, no mention of financial corruption and no mention of bureaucratic corruption.

And why would there be any mention of the real causes of our failure as a state?

After all, to do so would mean having to leave the bubble of denial and enter the brutal realty of what we really are as a nation.

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