Prior to the collapse of Ireland’s economy in 2008 there was a universal belief that Ireland possessed a functional financial regulatory system.
Subsequent to Ireland’s economic collapse there was a universal belief that light touch regulation was the core factor in bringing about the catastrophe.
Presently there is a universal belief that financial regulation has been radically reformed and is now fit for purpose.
All of the above beliefs are false.
Ireland has never enjoyed the benefits of real financial regulation. This is not an opinion, it’s a fact.
No financial institution or official has ever been charged with a crime despite the theft of countless millions over the decades.
Ireland did not suffer from light touch regulation; it was destroyed because there was no effective financial regulation whatsoever.
So called regulators knew about most of the major crimes committed over the years, like DIRT and Ansbacher, but did nothing.
When the media and whistleblowers (the real regulators) uncovered crimes that the Financial Regulator was not aware of no significant action was ever taken against the criminals.
As I write Irish citizens are continuing to suffer great losses because there is still no effective financial regulation in Ireland.
If what we are told by politicians, government officials and so called regulators is true, then the people involved in the Custom House Capital fraud would, at the very least, be under arrest.
That the people involved in this fraud are still walking around, enjoying the same rights and freedoms that law abiding citizens are entitled to, proves that there is still no effective financial regulation in Ireland.
Custom House Capital specialised in pensions for wealthy customers and managed investments of about €1.5 billion for about 1,400 clients.
The firm also invested in property in France and Germany on behalf of clients.
The company misused €56 million in clients’ money to cover up troubled property deals.
A report on the matter submitted to the High Court states:
There was a systematic and deliberate misuse of assets and cash belonging directly or indirectly to clients of CHC.
This misuse was deliberately disguised by CHC through the use of false accounting entries and the issue of false and misleading statements to clients.
The High Court ordered all reports on the matter to be sent to the Director of Corporate enforcement, the DPP, the Garda Commissioner and Revenue.
The so called Financial Regulator investigated CHC in 2009 after somebody noticed a strong odour coming from the company but, predictably, found nothing of great import.
Some managerial changes were recommended and the matter was dropped.
It was only when another company, Appian Asset Management, had taken over the non-property investment assets of CHC that serious concerns were raised.
It was only after this company acted that the so called Financial Regulator took any significant action.
Let’s repeat these facts as starkly as possible.
In 2009 the so called Financial Regulator carried out an in-depth investigation into CHC and found that, apart from some supervisory and organisational issues there was no significant problems with the company.
Here’s what the Regulator decided to do.
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 that advice and shortly thereafter sold part of its business to another company, Appian Asset Management.
It seems that this was an attempt by CHC to off load that section of its business where the fraud occurred while holding onto its property assets.
Remember, this is, effectively, what the Financial Regulator advised.
The crucial point in all this is that a company that wasn’t engaged in any investigation easily discovered major fraud in a company that had just been investigated by our so called reformed and fit for purpose Financial Regulator.
It should also be noted that CHC was heavily engaged in fraudulent activity in 2009 when the Financial Regulator was, allegedly, investigating the company.
One of the victims of this CHC/Financial Regulator scandal precisely summed up my views on this matter (My emphasis).
I would like to see some criminal charges against those involved.
I would like to see an action taken against the Central Bank (Financial Regulator) because they were protecting the firm when they should have been protecting the consumers.
As I say; there is no effective financial regulation in Ireland.
Dept. of Finance
Director of Corporate Enforcement
All political parties
One thought on “The CHC fraud proves that there is no effective financial regulation in Ireland”
The man on the street is regulated, heavily so. Three forms of I.D. just to open an account. What the fuck is that about? “Oh I look”,he might have said many times, “I demand many I.D. Forms from idiots; that’s regulation isn’t it?” That is the only regulation carried out by the financial regulator.
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