What happened last week in the Anglo trial?

An artist’s impression of the defendants in court this week: William McAteer, Pat Whelan and Seán FitzPatrick. Illustration: Alywyn Gillespie

An artist’s impression of the defendants in court this week: William McAteer, Pat Whelan and Seán FitzPatrick. Illustration: Alywyn Gillespie

Mon, Feb 10, 2014, 07:35

WITNESSES

Claire Pyke: former higher executive officer at the Companies Registration Office.


Aisling McArdle: regulation manager at the Irish Stock Exchange.


Natasha Mercer: former company secretary, Anglo Irish Bank.


Séamus Coffey: lecturer in economics, University College Cork.


Liam McCaffrey: former chief executive, Quinn Group



SNAPSHOTS FROM THE EVIDENCE
l The jury in the trial is the first in the history of the State to have 15 members. Paul O’Higgins SC, for the prosecution, told the eight women and seven men of the jury that legislation had been passed to allow larger juries to be chosen in lengthy cases. Judge Martin Nolan has said the trial could last until May 31st.


l Paul O’Higgins, in his opening speech, said that at the end of the evidence, a public ballot would take place and 12 jurors would be selected from the 15 to consider the case and reach a verdict.


l The three defendants, Seán FitzPatrick (65), William McAteer (63) and Pat Whelan (51), are accused of providing unlawful financial assistance to members of businessman Seán Quinn’s family and the so-called Maple 10, a trusted group of Anglo borrowers. The prosecution says the transaction was designed to create the public perception of stability in the bank’s share price. All three have pleaded not guilty.


l Anglo’s share price fell dramatically in 2008. On the first day of that year, the figure stood at €10.72. By March 17th – described in court as the St Patrick’s Day Massacre – it had fallen to €6.95. By December 31st the share price was €0.171.

l The board of Anglo Irish Bank normally held 8-10 scheduled meetings a year, former company secretary Natasha Mercer told the court. In 2008, it met 33 times, she said.


l Liam McCaffrey, former chief executive of the Quinn Group, agreed that Seán Quinn was “eternally optimistic” about Anglo Irish Bank’s share price and continued betting on its recovery as the stock fell in 2008.


l Quinn’s five children jointly owned the Quinn Group by 2008. The idea of leaving his children with independent wealth “went fatally wrong”, McCaffrey told the court.


l In September 2007, Quinn and McCaffrey met then Anglo chairman Seán FitzPatrick and chief executive David Drumm at a hotel in Navan, Co Meath. When they were told Quinn held 24 per cent of the bank’s shares through contracts for difference, they reacted with “concern” and “surprise”, McCaffrey told the court.

l Explaining how contracts for difference worked, Séamus Coffey compared the derivatives to betting on horses. The difference between owning a share outright and having a CFD position was akin to the difference between owning a share in a horse and placing a bet on one.


l In a statement to gardaí, parts of which were read in court, McCaffrey said he was told by Anglo that they had taken legal advice to clear the transaction and therefore presumed no issues were raised as regards its legality. In addition, he said, Morgan Stanley, who were executing the transaction, were experts in this type of transaction and he would have relied on them to raise any concerns they may have had as regards the legality of the transaction. He said: “I was also aware that the financial regulator was familiar with the transactions. However, they raised no concerns with us as regards legality.” Asked whether he was of the view that the regulator was positive about the plan, McCaffrey replied: “Yes.”


VOICES IN COURT

On top of me
Liam McCaffrey’s reply when asked by defence counsel Brendan Grehan SC where Seán Quinn sat in the Quinn Group’s hierarchy.


I think his view of the recovery changed, but ‘How low can it go’ was one comment he made
Liam McCaffrey on Quinn’s belief, in 2007-08, that Anglo’s share price would recover

It was a difficult and angry conversation. Either David Drumm walked out or Seán hung up. There was a row
Liam McCaffrey on a conference call on July 14th, 2008, on the plan to unwind Quinn’s CFD holdings in Anglo

It’s a bit like that movie, ‘Trading Places’. Win, lose, or draw, they always get paid
Michael O’Higgins SC, for Seán FitzPatrick, describing how big international institutions profit from the use of CFDs

Mr Quinn said he deeply regretted the situation and believed that Seán Quinn needs to be reined in and had been greedy in terms of his involvement with CFDs
A line from notes of a meeting between Seán Quinn and Pat Neary and Con Horan of the financial regulator’s office on February 28th, 2008. Quinn was referring to himself in the third person.