What Should The US Do If One Of The Biggest Banks In Ireland Blatantly Defrauded US Investors?

Reggie Middleton's picture


Since I'm not a securities attorney, let's get a basic understanding of where I'm basing my allegation - after all, I could definitely be wrong as a layman. From Wikipedia:

Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of securities laws.[1] Offers of risky investment opportunities to unsophisticated investors who are unable to evaluate risk adequately and cannot afford loss of capital is a central problem.[2][3]

Securities fraud can also include outright theft from investors (embezzlement by stockbrokers), stock manipulation, misstatements on a public company's financial reports, and lying to corporate auditors.

Characteristics of victims and perpetrators

Any investor can become a victim, but persons aged fifty years or older are most often victimized, whether as direct purchasers in securities or indirect purchasers through pension funds. Not only do investors lose but so can creditors, taxing authorities, and employees.

Potential perpetrators of securities fraud within a publicly traded firm include any dishonest official within the company who has access to the payroll or financial reports that can be manipulated to:

    1. overstate assets
    2. overstate revenues
    3. understate costs
    4. understate liabilities

So, with that layman's understanding of what securities fraud is (along with my emphasis added), let's move on. 

The Bank of Ireland

In the 2008 Annual Accounts (Irish version of Annual Report) of Bank of Ireland (see attached, page 178) it states the bank gave a first floating charge in favor of the Central Bank of Ireland (an arm of the European Central Bank) and the Financial Services Authority of Ireland over the Banks ‘right, title, interest, benefit, present and future, in and to certain segregated securities listed in an Eligible Securities schedule.’

Fact: The BoI 2008 Irish accounts (~annual report) refer to the charges in their Disclosure Section (see attached page from 2008 accounts) where they describe the charge as being over ‘certain segregated securities.’

Of paramount importance for US investors and regulators, there is an absolute omission of this information in the Bank of Ireland SEC 20F returns for 2008.

image006 image006

Other Discrepancies In Disclosure

The Bank of Ireland 2008 Irish Annual Accounts refer to the charges in their Disclosure Section (see attached page from 2008 accounts) where they describe the charge as being over ‘certain segregated securities,’ but no mention of ‘right, title, interest, benefit, present and future, in and to certain segregated securities listed in an EligibleSecurities schedule.’

There is also no mention of any information related to this floating charge in the Bank of Ireland SEC 20F returns for 2008.

It appears that this floating charge was not disclosed at the time of the stress testing of the bank conducted by the European Banking Authority.

It is possible that I may have overlooked such, and because of that possibility I have made the SEC 20F available for all who want to check over my work. Here is the UBI 2008 accounts and here is the SEC 20f-2008 for the Bank of Ireland.

Now of course, to constitute fraud there has to be a loss on the part of the one being defrauded or a gain on the part of the one being defrauded - at least according to Wikipedia. Otherwise, it would be a hoax. That's the Irish banking system, and not this bank in particular. So...

image003 image003

If you believe that the information above actually identifies a gross misrepresentation of fact, omission or outright fraud, simply contact the SEC and let them know that Reggie Middleton suggested they look into it. You can actually use this form to convey my message

Remember, extreme wealth concentrates, so you don't have to... Coming from a "Cyprus'd" bank near you! 

Other hard hitting pieces on the resurgent EU banking crisis

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Notarocketscientist's picture

I have submitted the form to the SEC.  With a link to this story

I am now waiting for the silent black helicopters to hover over the cliff in front of my residence before firing various paraphenilia through the window incinerating me and my family :)

Actually they probably have a spam filter that deletes every single email that comes from the complaint form.   So I have nothing to worry about.

HeavyShadow's picture

That's the way reg lad. There is some funny money floating about over here alright. Magic leprechaun gear that just vanishes. Like it was never there.

headless blogger's picture

This makes me realize how little I've been following the Irish side of the crisis. I had thought the Irish had already gone through a "phase I" economic crisis....It's hard to keep up with all of it.

jomama's picture

BYOKY. counterparty risk, bitchez.

All_Is_Well's picture


rsnoble's picture

Well I guess we'll be bombing Ireland while we're at it.

Paracelsus's picture

  I only wish those M***F***Rs who were boosters for the great business climate in Ireland,low corporate taxes etc.would stand up now and say they were wrong and they knew it. Then they can fall on there swords,as it were and cough up all their dough to help out the Irish people who will be F****D for generations. Think about all the good things that Capital could've done besides build a bunch of empty,trashed houses in the Irish countryside. The Irish banks were owned/backstopped by RBS,which was saved by the UK taxpayer. JUST DEFAULT. ICELAND HAD THE RIGHT IDEA.SCREW THE BANKERS.LET THEM SORT OUT THE COUNTERPARTY SHIT.ACTIVATE THE CDS CONTRACTS AND LETS BURN IT DOWN.But first quietly impound all Yachts and Biz jets....

Vegetius's picture

"Evil prospers when good men do nothing."

- Edmund Burke


Reggie you are as per the norm spot on with the Irish Banks. The rot however runs (as you and others have exposed) very deep, we can trace our problems in the Western banking system back to the ending of the Bretton Woods agreement and the rise and rise of Big Banking and Government reach arounds. The system is running on empty and the hollowing out of trust and belief in the present system is as you know creating a cascade effect that is I feel unstoppable now.

However that does not mean that Good men such as yourself or the others that write or comment on ZH should throw up our hands and walk away. ZH and other forums and indeed how we act in the real world can be used to show these crooks when they can no longer run from their crimes that it was a crime they were commiting and not an accident or oversight or "I was just following orders" excuse that these criminals will use in their defence.

The condition upon which God has given Liberty to Man is eternal vigilance

- John Philpot Curran


falak pema's picture

This whole Irish scammy is a front for UK banks; the lords of scam and financial architects behind the "corporate tax haven" status of Ireland from day ONE. It was a convenient conduit for them to use a small "spudsy" surrogate financial base as TROJAN HORSE into the EZ gravy train. Which has now gone sour in post 2008 Anglo banksta hubris and toxic sleight of hand running uncontrollably viral into ponzimania.

There are HUGE similarities in the way the UK banks used Irish fronts for RE and corporate scams with what the Russian Mafia has done in Cyprus. 

SAME TEMPLATE FOR HOT MONEY RECYCLING AND PONZI SCHEMING AND SAME types of CONDUIT INTO EZ; all aided and abetted by EZ large banks admittedly part of the global banksta scam.

One huge corrupt interlinked world that is now obliged to go cannibal and eat its own gullible investors and/or counterparties.

What you sow you now reap banksta crap artists.

ebworthen's picture

You don't need to be a lawyer to recognize theft.

Good job Reggie (and BTW, same for your work on AAPL).

fajensen's picture

But - You need lawyers to turn it into a scalable business model!

The They's picture

Reggie.  Love the analysis but I completely disagree with  complaining to the SEC.  In this age of too-big-to-prosecute, the only effect that will have is putting your name on a government list... a list I'd rather stay off of.

InTheLandOfTheBlind's picture

if you are posting here, you are already on the list....  


have a good day


Winston Churchill's picture

I hear there are  gate prizes at the FEMA camps.

"Showereng" may not be wise. though.........

NuYawkFrankie's picture

Re What Should The US Do If One Of The Biggest Banks In Ireland Blatantly Defrauded US Investors?


Hmmmm...  grant them a US Charter?

GoldIsMoney's picture

Free immigration to the US to help Bernanke out....

Vegetius's picture

"Anyone, then, who knows the good he ought to do and doesn't do it, sins"

James 4:17

Come on Reggie it is a sin of omission, as you are no doubt aware the elite in Ireland benefit from a first rate school system the best of these schools run by Religious Orders and everyone knows that a sin of omission is not a venal sin.

The Irish banks are run by and for the Irish elite and they have no problem defrauding anyone Irish or American, they should go to jail but they are not going to in Ireland thats for sure.

-  George Orwell

Herkimer Jerkimer's picture





Appreciate your work on this matter, Mr. Middleton!


I have filed my complaint with the SEC.



Reggie Middleton's picture

That's the spirit all need to have. There's no use complaining if you haven't hit the link to voice your dismay. Don't believe for a second that the SEC doesn't monitor my site and this one (ZH) regularly for hits on things that they miss or need a better handle on. Everybody who bitches and complain, feel free to do so, but only after you've clicked the SEC link/form above:

Yes, the little man gets burned quite often, but when the big boys burn the other big boys, then all you have to do is give a little nudge and then sit back and watch hell break loose.

From the SEC filing you can find big boys with the guns and the wherewithal to take it to the bank. The only thing most of these guys are missing is someone like me to walk them through the BS obfuscation maze...


Litigation in relation to the Debt for Equity Offers and application of the Stabilisation Act.

As described below, two groups of holders of Eligible Debt Securities commenced legal proceedings

against the Bank regarding the Debt for Equity Offers launched in June 2011.

In June 2011, a firm of solicitors acting for a holder of the 13.375% Unsecured Perpetual Subordinated

Bonds (ISIN: GB 0000510312) (the ‘‘13.375% Bonds’’) brought proceedings on behalf of its client that the

Proposed Resolution in relation to the 13.375% Bonds would be invalid and sought declarations to this

effect and an injunction by way of final relief restraining the Bank from tabling the proposed resolution or

exercising the call option in relation to the 13.375% Bonds. The matter was later resolved to the parties

mutual satisfaction.

A group of parties claiming to hold approximately US$750 million of Lower Tier 2 Eligible Debt Securities

commenced legal proceedings in England on 17 June 2011 against the Bank and The Law Debenture Trust

Corporation p.l.c. to obtain declarations including that the Proposed Resolutions in relation to these

Eligible Debt Securities would be invalid and that a subordinated liabilities order under the Stabilisation

Act in relation to these Eligible Debt Securities would not be enforceable under English law. The legal proceedings also sought an injunction by way of final relief restraining the Bank from accepting offers to

participate in the Debt for Equity Offers, taking any further steps in relation to the Debt for Equity Offers

and acting on the outcome of the Debt for Equity Offers including tabling the Proposed Resolutions and

exercising the call option. On 7 September 2011, the claimants in the proceedings (who by that date

claimed to hold approximately US$359 million of Lower Tier 2 Eligible Debt Securities) amended the

proceedings so as to seek only declarations in relation to a subordinated liabilities order made under the

Stabilisation Act in relation to these Eligible Debt Securities, including that such an order would not be

enforceable under English law. On 2 December 2011, the Minister for Finance publicly announced that he

was no longer considering the use of the powers available to him under the Stabilisation Act at that time.

The Bank continues to vigorously defend these proceedings.

On 28 June 2011, the Bank terminated a Debt for Equity offer in respect of the 13.375% Bonds in light of

the continued difficulties holders of the 13.375% bonds experienced in participating in the offer. On

24 August 2011, the Bank launched a new voluntary cash offer in respect of the 13.375% Bonds. On

22 September 2011, the Bank announced that £29,096,400 in aggregate nominal amount of the 13.275%

Bonds were tendered pursuant to the offer.

NotApplicable's picture

They monitor these sites in order to properly employ sound bite rhetoric. They could give two shits about anything of actual substance. Especially strongly worded letters sent from websites.

I can't fathom how you've so much information on criminality, yet still cannot connect the dots concerning how it functions so successfully. Then again, you hang around that incoherent tool Max Keiser, so there's that.

willwork4food's picture

Bullshit NA. They monitor sites for emotional charged response and need to understand the substance in order for them to gleen potential risk to the empire.And what's wrong with Max? Don't fuck with my boy max.

Reggie Middleton's picture

My friend you need to read more old school war strategy material, Sun Tzu, etc. Just think the enemy of thine enemy is thine friend. Don't think in terms of criminality or right and wrong  --- think in terms of accomplishing your objective. I just pasted info on bondholders who lost hundreds of millions of dollars with this bank. What do you think happens when they find they can bolster their cases, or even start actions in the states due to massive fraud on behalf of BofI?

96% losses hurt more than just mom and pop investors.

Herodotus's picture

Obama shoud bomb Dublin, and if that did not bring them around, he should bomb Belfast as well for good measure.


Steve in Greensboro's picture

What should the U.S. do?  As in U.S. government?  You know that you are talking about the most criminal U.S. Justice Department in the history of the Republic, don't you?

What I'd expect Eric Holder and Obie to do is to send a letter to the Bank of Ireland asking for a cut of the take.

fajensen's picture

They could torture someone into signing that letter - just for the sake of Principle.

Widowmaker's picture

Justice Inc. is a joke.

Banks, and sizable corporations are well beyond reproach, now backed up by precedent.

To answer Reggies headline question - nothing.  Not one fucking thing will be done whatsoever to right these wrongs.  Nothing you can do to remedy any fraud whatsoever will be tolerated. 

The entire "financial-complex" deserves death and everyone who touched it gets bars.  Burn it to the fucking ground.

That is what you do.

willwork4food's picture

Burn it to the fucking ground.

Alas, we have our Boston Bomber! Terrorist!!

Dear FBI- I want a cut.

The Abstraction of Justice's picture

Cancel St Patricks day, celebrate St George's day.

Dragons & knights > leprechauns.

No Euros please we're British's picture

That's really strange, because I don't recall that it was a major Irish bank that connived with a well known hedge fund to defraud investors into buying worthless bundled suprime mortgage derivatives. What did the US do about that?

Winston Churchill's picture

Well they are constantly trying to bury those facts ,so they are doing something.

i-dog's picture

I see you gave yourself a '5', Reggie! Did you really think this rehash was that good?

paint it red call it hell's picture

I think the precedent is set. Fine them a pittance, pat them on the mark to model balance sheet and tell them "May Lucifer Bless".

q99x2's picture

Arrest Eric Holder.

DoneThis2Long's picture

Holder, must know the truth about Obama's place of birth, and Obama must have some dirt on him, so they are both playing it safe covering each other's asses. Or, most likely, both subscribe to the same philosophy and goal, of destroying the Nation, and declaring the Constitution null 'n void. After all, they've had access to the nation's best kept secrets .... well, along with the chinese crackers.


DoneThis2Long's picture

I wonder how much love there is between the Cintonesa and Hussein? ON YT, there is an interview with her former campaign manager, whereby she disclosed that threats were made v. Chelsea should any crap re. Dear Leader should surface - that was during the 2008 campaign. Her manager did not strike me as a crock-pot. Sorry I do not have the linky handy to post, but it is easy to find.

NotApplicable's picture

Gang warfare. Same as it ever was.

Which is why nothing is more important to these people than loyalty (a.k.a. "safely blackmailed").

Ying-Yang's picture

Epric Holder.. fixed it for ya

willwork4food's picture

HANG Eric Holder....fixed it for ya again.

The_Small_Lebowski's picture

Hey Reggie,

you short Irish financials :) ??  Franklin Templeton are loving you right now!

Great work over the last few weeks. Unfortunatley for me Ive been trying to keep my few quid safe from these crooks the last two years - there is literally nowhere to hide.

My last bastion of 'security' is my local credit union - so please email me first before you blow the lid on them too!

Peace from Ireland!


Reggie Middleton's picture

I would love to hear from the legal experts out there on how this is not explcit and outright misrepresentation/omission/fraud on the part of Bank of Ireland.

Bank of Ireland $40B ADR loss in SEC perspective, C CDO loss $284M, GS subprime settle $550M, JPM mortg scam $154M

Scro's picture

Reggie I think your awesome, keep up the good work.

Thisson's picture

Your exposure of this problem hasn't caused a significant stock drop.  Investors can't sue without damages, which are shown using a stock drop.  So if there's no stock drop, there's no lawsuit.  Capiche?

Reggie Middleton's picture

You have to pay closer attention! Bond investors suffered significant losses, and as for the common equity investors...

Cheyenne's picture

Great question that's not asked nearly often enough. Fraud involves a showing of five elements:


The only element arguably not established by your piece is reasonable reliance by investors on BofI's material omission of information. Would they have stayed away from BofI had they been informed of the facts?

Your article includes a sidebar that gets at this question--almost: "Did the lack of material liability information make it possible, or probable, that U.S. ADR investors would have taken a material loss in 2008 from not knowing the extent of Ireland's liabilities of February 2008?"

Once you have someone willing to testify that he did in fact rely on BofI's omission (not that his reliance was merely possible or probable), then you've got what looks like an open-and-shut case of fraud.

My .02 anyway... Nice job.

Reggie Middleton's picture

Thanks. As for reasonable reliance, a good plaintiff's firm should have that covered after looking at the chart above, see http://www.lw.com/upload/pubContent/_pdf/pub835.pdf. To be honest, I believe I can assist a good plaintiff's firm to wreak havoc amongst the banks. As for reasonable reliance.... 


To maintain a claim for securities

fraud, it is well established that a

plaintiff must plead and prove both

(i) that it relied upon defendant’s

allegedly fraudulent conduct in purchasing or

selling securities, and (ii) that defendant’s

conduct caused, at least in part, plaintiff’s loss.

These two elements are generally known,

respectively, as “transaction causation” and

“loss causation.”

The “fraud on the market theory,” also well

established, entitles plaintiffs to a rebuttable

presumption of the existence of transaction

causation (e.g., that they relied upon allegedly

fraudulent information) even where they were

unaware of the fraudulent conduct at the time

of their purchase or sale. 

Some plaintiffs, however, have sought to

extend the fraud on the market theory to also

enable them to establish loss causation —

effectively relying upon the theory for “double

duty” to satisfy both causation elements.


Shevva's picture

Accountability in the finance industry that's so 200bc.