“We like Ireland very much because, unlike the Club Med countries, it doesn’t need structural reform of the economy All it really needs is to get through the financial crisis that was caused when its banks went berserk. But Ireland’s fundamentals are still there…Ireland will once again become the Celtic Tiger.”
Now US Commerce Secretary, Wilbur Ross with Simon Coveney in Washington DC last October
The accusation is quite simple. Ross, through his investment firm WL Ross & Co., took a near 35% stake in the Bank of Ireland in 2011, during the depths of the crisis. In 2012, he joined the company’s board of directors, but by 2014 he was selling his stake.
He made 500 million euros ($682 million), selling his shares at 26 to 33 euro cents a share over a few months. Ross stepped down from WL Ross & Co. – which is currently being sued by former employees for fee gouging – when he joined the Trump administration.
That would all be fine if it weren’t for the fact that it was later found that the Bank of Ireland was using deceptive accounting to make its balance sheet appear healthier than it was. Without that, Ross would not have been able to sell his shares at such a premium.
This alleged deception was discovered in 2015, shortly after Ross sold his stake, and of course the bank’s stock price suffered as a result. Ross, who as a board member, should have been familiar with the going-ons at the company, especially after doing due diligence and selling at the top.
And, if in the course of doing due diligence, he found out that there was something wrong with the bank’s accounting, he had a duty to report that to shareholders. If he didn’t, and he sold with that knowledge, as the report points out, that is a violation of insider trading laws.