Regulator’s office received ‘stream of emails’ about Quinn’s Anglo stake

Patrick Neary denies he was aware of the scale of businessman’s holding in bank

Former financial regulator Patrick Neary arriving at the Dublin Circuit Criminal Court to give evidence today. Photograph: Dara Mac Dónaill/The Irish Times

Former financial regulator Patrick Neary arriving at the Dublin Circuit Criminal Court to give evidence today. Photograph: Dara Mac Dónaill/The Irish Times

Tue, Mar 18, 2014, 18:36

A “stream of emails” to the financial regulator’s office indicated businessman Seán Quinn had substantial holdings in Anglo Irish Bank in February 2008, a month before the financial regulator said he knew about the holdings, the trial of three directors of the bank was told today.

Patrick Neary, former head of the Irish Financial Services Regulatory Authority (Ifsra), told the court he believed Mr Quinn when he told him in January 2008 that he only had small holdings in the bank and in February when he said he had “gone long in financials” , that is converted his holding to shares.

Mr Neary said he did not know of the large number of contracts for difference (CFDs) positions - investment products based on share value - Mr Quinn held until March 21st.

Patrick Gageby SC, for William McAteer, highlighted a series of emails to other officials in Ifsra from the Quinn Group that outlined Mr Quinn’s €2 billion exposure through CFDs.

He said the emails showed while Mr Neary understood Mr Quinn’s CFDs were history, “on the next floor below” there were “a stream of emails that indicated the man had substantial CFDs”.

“Yes, that’s what it is suggesting,” Mr Neary responded.

Mr Gageby asked if his colleagues ever told him of the information they had.

Mr Neary said he had no recollection of them telling him. Asked if he had “any idea how the breakdown of communication was such” that he was “ignorant of this”, Mr Neary said he did not.

Mr Gageby suggested the alternative was that he did in fact know about the size of the CFD position.

“That is not correct,” Mr Neary responded.

Mr Gageby asked Mr Neary if he “practised the art of not being told difficult things”. Mr Neary responded that he did not know there was an art.

Asked if it was possible he forgot, he said he did not believe that was the case.

Mr Gageby also highlighted a meeting of the Domestic Standing Group, a high level committee involving Ifsra, the Central Bank and the Department of Finance set up to discuss and prepare for economic difficulties, on February 22nd.

He opened a note to the court which showed Mr Neary had attended and there had been references to CFDs. The note mentioned the ramifications in the market “if current positions become publicly known”. Mr Gageby asked what the “positions” referred to.

Mr Neary responded that he did not know.