Updated 2.02pm
SEAN QUINN TOLD the Financial Regulator that he had been greedy and needed to be reined in, the trial of three senior executives at Anglo Irish Bank has heard.
The Financial Regulator met with Sean Quinn in February 2008 to tell him that there were concerns about the scale of his financial problems.
According the minutes of the meeting on 28 February 2008 which were shown to the court, Quinn said that he deeply regretted the situation.
Speaking about himself in the third person, Quinn told Patrick Neary that “Sean Quinn needed to be reined in”. He said that he had been greedy with his involvement in contracts for difference, the complex financial instruments which he had used to build up his investment in Anglo Irish Bank.
Quinn told the regulator that he had lost money before in tech stocks in 2001 and had committed to not getting involved again but instead had invested in stocks he was familiar with, in banking and building, both of which had been badly hit by the burgeoning financial crisis.
However Quinn reiterated that he believed it would be a mistake to dispose of his holding in Anglo as the share price continued to drop as he remained optimistic that the share price would recover.
Liam McCaffrey, the former CEO of the Quinn Group who was giving evidence, agreed that it was not usual for the Financial Regulator to meet someone on their own.
The meeting came just eight days after Quinn had already met with the Financial Regulator about issues with Quinn Insurance Limited, which would eventually lead to the company being fined €3.5 million several months later.
The meeting on 20 February was attended by seven people, including Sean Quinn and Liam McCaffrey on the Quinn side of things and Patrick Neary and Con Horan of the Financial Regulator. Minutes of the meeting say that Neary began the meeting by highlighting the seriousness of matters under consideration.
Sean Quinn apologised sincerely for the financial situation at Quinn Insurance and the problems that it was creating for the Financial Regulator, according to the minutes. He said that anything that would be told to the Regulator by Quinn Insurance from now on would be 100 per cent true.
Sean Quinn assured the financial regulator that €100 million in cash would be put into Quinn Insurance by the end of March 2008.
According to the minutes, Quinn also expressed the hope that the Financial Regulator would accommodate a company that had made a mistake and “freely admitted” that the company had made errors in its transactions.
Quinn was pressed several times during the meeting about injecting cash into the company immediately but he indicated that he would be unwilling to sell shares too quickly as he was optimistic that the price would recover.
Asked whether the Financial Regulator would have been told by anyone from Quinn that Quinn had been building up a stake in Anglo, McCaffrey answered: “No”.
Quinn’s name would not have appeared on a shareholding listing because of his use of Contracts for Difference, and while there had been some speculation in the media that he was building up his holding, his use of 9 different CFD providers meant that it would have been very difficult for anyone to know what his shareholding was, the court heard.
Patrick Neary said that the issue would remain a private matter between the Financial Regulator and the company, which Sean Quinn agreed with, saying that he wanted to get the matter sorted as quickly as possible, according to the minutes of the meeting.
Brendan Grehan SC acting for Patrick Whelan asked if McCaffrey agreed that Quinn was gambling with CFDs. “There’s no other polite way of putting it,” he said.
McCaffrey disagreed with the use of the word gambling, saying he preferred to refer to it as a highly leveraged derivative.
McCaffrey agreed with Grehan that he could see why the bank would be concerned as its share price fell even as Quinn’s holding in the bank continued to increase, saying it was a large concentration of the ownership.
However he did not answer a question from Grehan about how having one owner of CFDs meant the person was vulnerable and ”it would be a little like a train going off the tracks”.
“That calls for speculation,” McCaffrey told the court. “I’m not in a position to speculate on that”.
McCaffrey gave the evidence on the third day of the trial of three former senior Anglo Executives. Sean FitzPatrick of Greystones, Pat Whelan of Malahide and Willie McAteer of Auburn Villas in Dublin 6 have all pleaded not guilty to 16 charges of unlawfully providing financial assistance to individuals to buy shares in the bank.
Sean Quinn, who is in the courtroom, is likely to give evidence in the trial this afternoon.
Originally published 12.14pm
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