A Red Flag Ignored

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The Irish Stock Exchange referred a memo last year to the Office of the Director of Corporate Enforcement (ODCE) about the “suspicious nature” of shares traded in Siteserv prior to the company’s sale in 2012.

An annual report by the Irish Stock Exchange (ISE) on its activities for 2015 — sent last week to Mary Mitchell-O’Connor, the minister for jobs, enterprise and innovation — notes that the memo was sent to the ODCE “given the suspicious nature of certain dealings” that emerged last year.

It is understood that this is a reference to a sharp rise in share activity in Siteserv in the month before the state-owned bank IBRC received the first bids for the firm in what was supposed to be a confidential sales process.

Last year The Sunday Times revealed how 6.4m shares in Siteserv changed hands in November 2011, despite the shares being worth only between 2c and 3.5c each. Between January and October 2011, only 121,000 shares had changed hands.

The first media report that Siteserv was for sale was published in January 2012

…A commission of investigation into IBRC, which has been asked to investigate the share activity, has also been frustrated in its attempts to uncover the owners of the nominee accounts that bought shares prior to the sale of Siteserv.

It has said legislation must be enacted to let it investigate the share activity in advance of the sale to Millington.

ISE flagged ‘suspicious’ Siteserv activity (Colin Coyle, Sunday Times)

Previously: Timeline To A Killing

Rollingnews

19 thoughts on “A Red Flag Ignored

  1. Kolmo

    Insiders be insiding……another day, another nexus of insiders story…..why bother…

    1. Kolmo

      P.S. – Keep up the excellent work BS!, don’t let my glassy-eyed resignation to buziness-as-usual criminality in Ireland stop the good work!
      (Glassy-eyed from impotent anger, not lunchtime brandy)

    1. Sheik Yahbouti

      No, but we could give Catherine Murphy TD another damn good thrashing – and sue her for every cent she has – that should cure everything.

      1. Anne

        Or hire some private investigators to get some dirt..

        What a despicable fat cretin, he who can’t be named is.

  2. DubLoony

    “frustrated in its attempts to uncover the owners of the nominee accounts that bought shares prior to the sale of Siteserv.”

    Seems to be a bit of a thing, that the actual owners of assets are not named.
    Who owns what should be a basic legal requirement. Its like someone was avoiding tax or scruitiny or something.

  3. Anne

    Have we ever had any convictions for insider trading in Ireland? Ever? Course not.
    Which organisation is responsible for investigating insider trading? Any? Nah, of course not.

    Great country all the same isn’t it. Martha Stewart would love it here.

  4. Ronan Johnson

    I’m probably repeating a lot of what’s been said on this topic here on BS recently, but the only reason nothing has happened on this is (probably) because the “powers that be” don’t want to have to do anything when they find out.

    They’ll be up against (probably) certain people who don’t just roll over and take their punishment for breaking the law like the rest of us are supposed to.

    To a certain extent, you can understand the grief of getting involved in years of court cases, and appeals, and delaying tactics etc, in trying to bring the law breakers to justice – particularly when you’re just a lowly civil or public servant who’s had your salary and pension cut in order to fund bailing out those same people.

    The issue over nominee accounts is a perfect illustration of this.

    Fact 1 – Trades are Reported to the Central Bank of Ireland

    The Central Bank of Ireland requires that (eventually) EVERY SINGLE TRADE in Irish trades equity instruments is reported back to them.
    So, if you trade (in SiteServ for example) through an Irish broker, that trade is reported directly from the broker to the Central Bank of Ireland. This is a relatively robust process – it’s been in place now since 2008.

    But if you trade in SiteServ via a broker outside of the jurisdiction – e.g. you buy through a broker in the UK, then in theory, that trade is reported to the UK authorities, who are eventually supposed to feed that trade information back to the Central Bank of Ireland. That too has been in place since 2008, but I can’t comment on how successful the implementation has been.

    Fact 2 – No Broker Can Trade for you if they don’t know who you are

    Over the years, there have been numerous EU regulations implemented in this country which prevents and financial institution taking money from you and carrying out any financial dealings on your behalf, until they know exactly who you are, and where your money came from.

    We see this every day when we have to provide reams of documentation to any bank or building society in order to even just open a 1% earning savings account.

    If you’re investing millions of euro in buying SiteServ shares, you can be damn sure that the broker you’re dealing with knows who you are.
    They may put “nominee account number 47” as the account holder name, but they know who is ultimately behind that nominee account.

    But so also do the Central Bank of Ireland – or, they’re supposed to. All brokers are obliged to report a listing of accounts held by them to the Central Bank of Ireland on a regular basis. This reporting is supposed to report the underlying beneficial owner of all accounts held at the broker – and in theory, if they reported an account owner as “nominee account number 47”, then the Central Bank of Ireland should be getting back to that broker to get them to confirm the underlying owner.

    Conclusion

    The information is available, to the relevant authorities, to determine who bought and sold those shares, and via which brokers, and how much was paid.

    But I guess no one wants to go and query the database to find out.

    Why? Or do we even need to ask?

    1. Anne

      Conclusion
      The information is available, to the relevant authorities, to determine who bought and sold those shares, and via which brokers, and how much was paid.

      But I guess no one wants to go and query the database to find out.

      Why? Or do we even need to ask?

      + 1 Could it be referred to the EU I wonder?

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