View from Dublin: Drumm trial a complicated criminal process
David Drumm's conviction for false accounting and conspiracy to defraud was a very unusual, technical and prolonged criminal trial. The former chief executive of Anglo Irish Bank never denied his participation in the transactions with Irish Life & Permanent. The trial was all about whether they had illegally created a deception.
Drumm's defence was that he had engaged in these transactions in the context of the stressful events of the time and had "put on the green jersey".
The Irish banking system was in trouble and he had answered Ireland's call, having had the Central Bank encourage Irish banks to support each other.
It was also argued that he didn't benefit from the transactions. But that isn't necessarily correct.
Firstly, Judge Karen O'Connor pointed out that irrespective of who in the Central Bank said what about Irish banks helping each other, these transactions were either against the law or they were not. Looked at through this prism, setting up a series of circuitous multi-billion euro transfers had created a false impression of the financial position of the bank.
It was a most unusual fraud, because Drumm was never going to pocket the proceeds of the fraud or the false accounting.
This was a deception on the market aimed at saving the bank. And it failed.
In that sense, it was ultimately a waste of time.
Drumm might not have ever pocketed the benefits of the fraudulent transactions, but he did stand to gain if the scheme had worked.
He would have kept his job if the bank did not go under.
He was a highly-paid multi-millionaire who stood to suffer financial and reputational damage if the bank collapsed.
At the heart of the fraud on the market was a deception.
Anybody who was interested in buying or selling Anglo Irish Bank shares, or anybody considering trading in its bonds, or considering withdrawing their deposits, was given a false account of the financial position of the bank. They suffered as a result.
Anybody who bought shares at this time was deceived.
Once the government decided in September 2008 to guarantee all of the deposits in all of the Irish banks, the deception was essentially redundant anyway. The government decision to guarantee all liabilities and the subsequent collapse of the bank resulted in a €30bn bill for taxpayers.
One could of course argue that he was acting to prevent the collapse of the bank, before the taxpayer was on the hook for the money.
Nevertheless, the transactions were reckless and illegal.
It is troubling to think that if Anglo Irish Bank had not collapsed, details of this fraud on the market might never have come to public attention.
A massive deception would have taken place and we might never have known about it.
Questions were being asked about these deposits in some financial and regulatory circles quite early on, but would they have been fully pursued and referred to the necessary authorities if the bank had not collapsed under the weight of its excessive, turbo-charged lending?
It is quite possible they would not.
The audit committee of the bank missed them.
The regulator missed them.
Very few people knew the full details and the reputational damage to Irish banking that would have flowed from disclosure might have kept the transactions below the radar.