Anglo Trial

Trial of three former Anglo Irish Bank executives begins

Irish Times Reporters Wed, Feb 5
 
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  • This event has now ended
  • 10:16
    Good morning, the trial of former Anglo Irish Bank executives Willie McAteer, Sean FitzPatrick and Pat Whelan commences this morning at Dublin Circuit Criminal Court. We will be covering proceedings live as they occur. Check back in and read as they happen.
  • 10:25
    The three defendants have arrived in court this morning ahead of the commencement of proceedings.
  • 10:35
    On trial are Willie McAteer (left), Sean FitzPatrick (centre) and Pat Whelan. <br>They have pleaded not guilty to 16 charges each of unlawfully providing financial assistance to individuals for the purpose of buying shares in Anglo Irish Bank.
    On trial are Willie McAteer (left), Sean FitzPatrick (centre) and Pat Whelan.
    They have pleaded not guilty to 16 charges each of unlawfully providing financial assistance to individuals for the purpose of buying shares in Anglo Irish Bank.
  • 10:38
    Watch Tom Lyons previewing the trial here.
  • 10:41
    The trial is taking place in Court 19 in the Courts of Criminal Justice building.

    Mr Fitzpatrick (65), of Whitshed Road, Greystones, Mr McAteer (63) of Auburn Villas, Rathgar and Mr Whelan (51) of Coast Road, Malahide, have been charged with 16 counts each under the Companies Act of providing unlawful financial assistance to individuals in July 2008 to buy shares in the bank.

    The 16 people named in the charges are Patricia Quinn; Sean Quinn jnr; Collete Marie Quinn; Aoife Quinn; Brenda Quinn; Ciara Quinn; Paddy McKillen; Séamus Ross; Brian O’Farrell; John McCabe; Gerard Maguire; Patrick Kearney; Gerard Conlon; Gerard Gannon; Seán Reilly and Joseph O’Reilly.

    The charges relating to Patricia Quinn are alleged to have occurred between July 10th and July 30th, 2008.

    Mr Whelan has pleaded not guilty to seven additional charges of being privy to fraudulently altered loan facility letters sent to seven of the borrowers relating to the purchase of shares of Anglo. These alleged offences occurred in October 2008.

    Last Friday, all three accused entered not guilty pleas to all counts before the jury panel at Dublin Circuit Criminal Court.

    The trial could last up to four months, which would make it the longest in Irish legal history and will involve around 25 million pages of evidence and 800 witness statements.

    Stay here for updates throughout the day on the first day of the trial.

  • 10:43
    Barristers and solicitors from both legal teams are arriving in court 19 now.

    The DPP is being represented by senior counsel Paul O’Higgins and Una Ni Raifeartaigh.

    Mr Fitzpatrick is represented by Michael O’Higgins SC, Mr Whelan is represented by Brendan Grehan SC and Mr McAteer by Patrick Gageby SC.

    The trial will begin with an opening speech for the prosecution by Paul O’Higgins. He will explain the trial process as well as give a brief summary of the case against the three men.

    This will be followed by the first of 103 witnesses. These witnesses include former employees of Anglo, former and current employees of the Central Bank and dozens of gardai. Members of the Quinn family and the other investors named in the charges are also to be called.

  • 10:50
    The jury has arrived and the court is now full of lawyers and at least 40 members of the press.

    It took just two hours last Friday for the 15-strong jury to be selected for this trial, out of a panel of 350 people who answered the 1,500 jury summonses issues by the Courts Service.

    Eight men and seven women will hear the trial, which could last up to four months.
  • 10:53
    Judge Nolan excused 131 people from serving after they said they had an issue with being on the jury. Two people were excused for being employed with banks and one person was excused for owning AIB shares.

    Legal teams for the three accused objected to 17 people in total, while the prosecution objected to two people.

    The entire process was completed significantly earlier than expected.

    Judge Nolan gave the jurors one last warning not to investigate the case themselves or even to read up on it. He said he will consider it a breach of their oath if they do so.

    The 15 jurors were instructed to nominate a jury foreman. The trial will sit every weekday from 10.30am to 4pm. Judge Nolan said this timetable will be “fairly strictly enforced”.
  • 10:56
    Judge Martin Nolan has asked the jury members if they are all still happy to serve on the jury.

    After handing a letter to the judge, one juror member has been excused. Judge Nolan said that he was excusing the juror “by reason of certain private considerations”, and said he would not make this reason public.

    Another jury member said when it became known to his family on Friday that he was serving as a juror on this trial, he learned that his sister has served in a company facility with IBRC (formerly Anglo Irish Bank).

    Senior counsel for the DPP, Paul O’Higgins, asked if the juror’s sister has had any involvement with the witnesses. The juror said he did not know because he has not discussed it further with his sister.

    Mr O’Higgins and counsel for all three defence teams then said that had no issues with this juror continuing to serve.

    Given that one juror has now been dismissed the Court must now select a substitute juror from today’s regular jury panel.
  • 11:02
    Sean FitzPatrick arrives at Dublin Circuit Criminal Court this morning. Photograph: Niall Carson/PA Wire
    Sean FitzPatrick arrives at Dublin Circuit Criminal Court this morning. Photograph: Niall Carson/PA Wire
  • 11:08
    For full coverage of the trial, take a look here. For a Q&A explaining the background by our Legal Affairs Correspondent Ruadhan Mac Cormaic, check in here.
  • 11:14
    Pat Whelan arrives amid the rain this morning for trial. Photograph: Collins Courts
    Pat Whelan arrives amid the rain this morning for trial. Photograph: Collins Courts
  • 11:20
    The three accused have now been arraigned again. The charges have been read out by the court registrar.

    Standing before the court, Mr FitzPatrick, Mr Whelan and Mr McAteer responded “not guilty” to the charges one after another, as they did last Friday.

    They have had to be rearraigned in front of the regular jury panel because of the requirement for a new juror.

    Judge Martin Nolan explained to the jury panel that the three are accused of allowing “financial assistance for the buying of Anglo Irish Bank’s own shares”.

    He told the jury members they must not serve on it if they hold strong views in relation to the “certain public controversy” around Anglo Irish Bank that would prevent them from giving the accused a fair trial.

    He also told them they should not serve if they have expressed public views on the trial on websites or social media such as Facebook, as it could cause embarrassment during the trial if these views became public.

    Judge Nolan also reminded members that they cannot serve if they have served a jail term in recent years or if they are a garda or a serving member of the Defence Forces.

    He told them if they own or have owned bank shares they should not serve.

    The judge then read out a list of all 103 witnesses and told the jury panel that if any of them know any of these witnesses they should make it known to the court.
  • 11:24
    Willie McAteer amid members of the media as he arrives at court this morning. Photograph: Niall Carson/PA Wire
    Willie McAteer amid members of the media as he arrives at court this morning. Photograph: Niall Carson/PA Wire
  • 11:31
    The trial has been adjourned until midday today.
  • 11:55
    The court arose for what was to be a short break before midday, when the trial proper was to begin before the jury with an opening speech by prosecuting counsel Paul O’Higgins SC.

    Selection of a replacement jury has taken place, the members of the jury panel having been given all the relevant warnings by Judge Nolan.

    The jury now consists of seven men and eight females.

    Mr O’Higgins’s speech is expected to take up the remainder of the day. It will be tomorrow before we hear from the first witness.
  • 11:59
    We've got a new gallery online of images from the beginning of the trial today. Take a look at them here.
  • 12:31
    The court is back in session and Paul O’Higgins SC has begun his opening speech for the prosecution.

    In his speech he will outline the mechanics of the trial process. He will explain to the jury the roles of the judge and the prosecution and defence barristers, as well as the jury’s role.

    He will give the jury an explanation of the law, specifically the right to a fair trial, along with the concepts of each citizen being considered innocent until proven guilty and the burden of proof lying with the prosecution.
  • 12:34
    The media scrum appropriately dressed for the bad weather outside court earlier today. Photograph: Dara Mac Dónaill/The Irish Times
    The media scrum appropriately dressed for the bad weather outside court earlier today. Photograph: Dara Mac Dónaill/The Irish Times
  • 12:47
    Mr O’Higgins has begun to outline evidence in the case.

    He has already told the jury this case relates to a criminal matter.

    He said there is no such thing as trial by judge and jury. He told the jurors they are the sole judges in this case and will themselves decide on the facts.

    There are 15 jurors sworn for this case because the law was changed last year to allow for particularly lengthy trials such as this, he explained.

    This is to allow for the fact that during a lengthy trial jurors may get sick or die, he added.

    The barrister told the jury that after the evidence has finished, a public ballot of the jurors will take place and 12 members out of the 15 jurors will be selected to consider the charges.

    He told them: “You are the 15 judges of every matter of fact in this case.”

    He explained that the trial judge is the arbiter of the law. The judge will direct them in matters of law which will have a bearing on how the case runs.

    While the jury is supreme in all matters of fact in the case, he went on, the judge is supreme in all matters of law.

  • 12:56
    Michael Staines, solicitor for Sean FitzPatrick, arriving at Dublin Circuit Criminal Court today. Photograph: Collins Court
    Michael Staines, solicitor for Sean FitzPatrick, arriving at Dublin Circuit Criminal Court today. Photograph: Collins Court
  • 13:10
    Mr O’Higgins SC, for the prosecution, has told the jury the presumption of innocence is a bedrock of the law which applies in favour of every citizen that comes before a court in Ireland.

    That means the prosecution bears the obligation of proving beyond a reasonable doubt every element of every crime. He said they bear the onus or burden of proof until the end of the case.

    The proof of guilt in a criminal case is not based on the balance of probabilities, he added. It is based on the jury being satisfied beyond a reasonable doubt.
  • 13:15
    The trial has broken for lunch. Mr O’Higgins SC will continue his opening speech at 2pm.

    Before the break, he told the jury that companies were a product of the Industrial Revolution.

    They allowed people to get together to take risks, and have led to great employment and wealth. He added that companies could do great good - as well as great damage.

    A company allowed individuals to take risks that they would not be able to take individually.

    Companies are treated are legal persons in law, he told the jury.

    The statements are part of the prosecution opening speech and are not in themselves evidence.

    A company’s shares are part of its stock, he continued, and the value people place on shares designates the value of a company.

    The board of directors in nearly all companies have an entitlement to say yes or no, in the last analysis, to anything. They are elected to run the company.

    The three accused were all officers of the company, as former directors of Anglo Irish Bank. He said if a company commits an offence the officers of the company may become liable.
  • 13:31

  • 13:40

    Here are key points of proceedings so far:

    • Standing before the court, the three accused, Sean FitzPatrick, Pat Whelan and Willie McAteer, have again responded “not guilty” to charges of unlawfully providing financial assistance for the purpose of buying Anglo shares in 2008, as they did last Friday.

    • Paul O’Higgins SC, for the prosecution, has told the jury the presumption of innocence is a bedrock of the law which applies in favour of every citizen that comes before a court in Ireland.

    • Judge Martin Nolan has told the jury members they must not serve on it if they hold strong views in relation to the “certain public controversy” around Anglo Irish Bank that would prevent them from giving the accused a fair trial. He also told them they should not serve if they have expressed public views on the trial on websites or social media such as Facebook, as it could cause embarrassment during the trial if these views became public.
  • 14:04

  • 14:48
    Counsel for the prosecution Paul O’Higgins SC at court today where he gave opening speeches in the trial of three former Anglo Irish Bank executives. Photograph: Collins Courts
    Counsel for the prosecution Paul O’Higgins SC at court today where he gave opening speeches in the trial of three former Anglo Irish Bank executives. Photograph: Collins Courts
  • 14:58
    Paul O’Higgins SC is back on his feet and has resumed his opening prosecution speech after the lunch break.

    He has said a non-executive director is someone whose only connection with a company is being a director. An executive director may hold other positions in a company.

    A share is a person’s stake in a company. How they are dealt with is a very important thing to people who hold shares.

    The issue is not academic, he said - it’s about real people, their futures, their lives.
  • 15:04
    There are two categories of charges in this case, Mr O’Higgins pointed out. The first 16 charges are against all three accused, and the last seven are against Pat Whelan only.

    The first set say that in July 2008, actions were taken by the accused that were contrary to Section 60 of the Companies Act, 1963.

    He said the three former directors were officers of Anglo Irish and that they authorised the bank to give unlawful financial assistance to a number of people for the purpose of purchasing shares in the bank.

    A share price, he said, is a measure of the worth of a company. If the company itself uses company money in order to purchase its own shares, people might incorrectly think shares were being bought by outsiders.

    This could also affect the rights of creditors of the company and the rights of potential shareholders, who see the company seems to be in a certain place in the financial popularity stakes, when in fact it is in another, he said.

    The law was in place so the true value of a company could be seen by the public.

    Section 60 of the Act says it is unlawful for a company to give any financial assistance to anyone for the purpose of buying shares in the same company.
  • 15:20
    The lending done in July 2008 was in very extraordinary circumstances and had nothing to do with the “ordinary business” of the bank, Mr O’Higgins SC has told the jury.

    This will be an important issue in this trial.

    If a company acts in contravention of Section 60, every officer of the company who is in default is liable.

    Any officer is in default if he or she authorises or permits the default mentioned in the Act.

    An officer shall be presumed to have permitted a breach by a company unless he or she can establish that they took all reasonable steps to prevent the breach by the company, or that due to circumstances beyond their control were unable to stop it.

    There is a duty by a director of a company to take all reasonable steps to prevent a breach by the company.
  • 15:38
    Mr O’Higgins has given a brief history of Anglo and has described how the bank grew substantially from 1992 up to the time of the alleged offences.

    He said the jury will hear “quite a lot” about David Drumm, who took over as chief executive of the bank from Sean FitzPatrick in 2005.

    Mr O’Higgins described Contracts for Difference (CFDs) as “an extraordinary form of gambling” offered to members of the investing public by “financial geniuses”.

    He said: “If I had €1,000 and I wanted to put it into €10 shares, then I could buy 100 shares. The creators of CFDs did something different.

    “For a commission you go to a CFD provider. Instead of buying shares you gambled on the future of shares. You didn’t have to buy them. You might only have to pay 10 or 20 per cent of the cost of the shares.

    “Instead of buying 100 shares I invest my money in a thousand shares. If I take my CFD I pay 10 per cent of the value of 1,000 shares which are worth €10,000.

    “If they go up I gain €1,000. If they go down I lose €1,000. It means I am gambling large sums on the possibility that shares which I don’t own may go up or go down.

    “At the end of a fixed period there is a closing off and the bookie pays you or you pay the bookie. You may own €1,000 or you may lose €1,000. If you lose the €1,000 you have to top up the amount you have with the CFD provider.

    “Or you can close off the position - it means the shares are sold and you have to pay what you owe.”
  • 16:00
    Judge Martin Nolan earlier today reminded members of the jury panel that they cannot serve if they have served a jail term in recent years or if they are a garda or a serving member of the Defence Forces.
    Judge Martin Nolan earlier today reminded members of the jury panel that they cannot serve if they have served a jail term in recent years or if they are a garda or a serving member of the Defence Forces.
  • 16:25
    “No doubt you all have heard of Sean Quinn, the Quinn family and Quinn enterprises,” Mr O’Higgins has told the jury.

    Some time in 2007 there were rumours that Mr Quinn had some kind of interest in the bank, he said.

    Normally it would be known if persons had a shareholding in the bank - this would be a matter of public knowledge.

    Sean Quinn had a very large interest, through Contracts for Difference, in Anglo’s shareholding.

    “We’re talking about tens of millions, maybe hundreds of millions,” he said.

    In September 2007 at a meeting in the Ardboyne Hotel in Navan, Co Meath, David Drumm and Mr FitzPatrick met Sean Quinn.

    The board of the bank were “enthusiastic” to bring an end to the then current situation, but it didn’t come to an end.

    In March 2008, when US bank Bear Stearns collapsed, Anglo shares fell from €17 per share to €6.50.

    On March 27, 2008, during another meeting between Anglo and the Quinns, an agreement was made for a certain amount of Mr Quinn’s shareholding to be placed on the market.

    The bank later got full power of attorney over Mr Quinn’s CFD position in order to unwind it.

    Sometime around July 8th, Anglo decided to do something which the prosecution allege was absolutely illegal.

    “The bank decided they would put together a scheme where the Quinns did buy a shareholding in Anglo Irish Bank directly and others were to take a shareholding directly, and there would be a market announcement saying that the Quinn CFD position and the Quinns had ‘gone long’ on their shareholding,” Mr O’Higgins said.

    That was a choreographed position, counsel says.
  • 16:29
    In practice, the people who really dealt with the matter by supplying the money were in the bank itself, counsel alleged.

    The bank dealt with six Quinn family members and assembled a group of 10 other “supposedly high net worth” people, he continued.

    “This involved lending enormous amounts of money to what became known as the Maple Ten.”

    The scheme involved lending more than €700 million to individuals for the purpose of buying shares in the bank.

    The prosecution said this was for a variety of reasons, and none of these were part of the ordinary course of business.

    “Don’t bother about the details really. We’ll fill in the paperwork” is how Mr O’Higgins described how the bank sought investors in its shareholding around that time.

    The prosecution are alleging Pat Whelan was very much involved in this.

    They also allege Willie McAteer knew all about the matter and that Sean FitzPatrick, as chairman of the board, was told about the lending and the resolution of the situation, and that he did nothing to stop it - and permitted it.
  • 16:40
    The trial has concluded for today, and will be covered live again on Irishtimes.com tomorrow.

    Prosecuting counsel Paul O’Higgins SC has this afternoon finished his opening speech, which lasted about two hours.

    His final points referred to the separate charges against Pat Whelan.

    He told the jurors that in October 2008 Mr Whelan allegedly decided to send a new loan facility letter backdated to July of that year which would drop the personal recourse on the loans from 25 per cent to nothing.

    This would mean the bank would lose out on about €112 million and others would be saved that amount.

    Before day one of the trial ended, defence counsel for Mr Whelan, Brendan Grehan SC, said his client was making a number of admissions to the court.

    These include that he was aware of the plan to “enable an orderly unwinding” of the CFDs position, known as the Maple Transaction.

    He said Mr Whelan understood this plan was in compliance with all legal requirements.

    The trial is set to hear evidence from the first witness tomorrow morning.