Regulator did not know about size of Quinn stake in Anglo until March 2008

Patrick Neary did not want to be ‘quizzing’ Seán Quinn about size of his Anglo holdings

Witness Patrick Neary, head of the Irish Financial Services Regulatory Authority, at Dublin Circuit Criminal Court on Thursday. Photograph: Collins Courts

Witness Patrick Neary, head of the Irish Financial Services Regulatory Authority, at Dublin Circuit Criminal Court on Thursday. Photograph: Collins Courts

Fri, Mar 14, 2014, 01:00

The head of the Irish Financial Services Regulatory Authority has said he did not know the full extent of businessman Seán Quinn’s holding in Anglo Irish Bank until March 2008.

Patrick Neary, who was appointed chief executive of the regulatory authority in 2006, told the trial of three former directors of Anglo he did not know the size of the holding until he was informed on March 21st, Good Friday.

The court had heard that then chief executive of the bank David Drumm and its chairman Seán FitzPatrick had known about the holding since September 2007. Mr Quinn had contracts for difference (CFDs) – investment products based on share value – worth more than 28 per cent of the bank’s shares.

Mr Neary said he got a call from Mr Drumm in autumn 2007 and had a meeting with him. Mr Drumm asked if he could come to see Mr Neary “in person”. This was an unusual request, Mr Neary said, as he did not normally meet chief executives, but he agreed.

He said Mr Drumm was concerned about rumours that Mr Quinn was possibly holding CFD positions in the bank. Mr Neary said he had heard the rumours as well, and Mr Drumm felt the holding might be “even bigger” than 10 per cent. He wanted to know if the regulator could find out, Mr Neary said.

However, he told the court, CFDs were not regulated products so “we had no statistics, no information collected and no way of finding out”. He said he asked Mr Drumm if he established further information to let him know.

Cross-examined by Brendan Grehan SC, for Pat Whelan, Mr Neary said Mr Drumm was “most probably aware” at the time that Mr Quinn had a CFD holding of 28 per cent, “but he chose not to tell me”.

Mr Grehan pointed out that evidence had been given that the board of Anglo became concerned about the holding in September 2007 and had asked Mr Drumm to inform the regulator of the position. The board understood “you were told”, Mr Grehan said.

“I wasn’t told the level,” Mr Neary responded.

“You didn’t ask outright?” Mr Grehan asked. “I don’t recall asking and he didn’t tell me,” Mr Neary responded.

Mr FitzPatrick (65), Greystones, Co Wicklow, Willie McAteer (63), Rathgar, Dublin, and Mr Whelan (51), Malahide, Dublin, have been charged with 16 counts of providing unlawful financial assistance in July 2008 to buy shares in the bank.