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Allegations of Fraud, 20% Drop In Stock Price, Market Manipulations, Internal Investigations: Nothing To See Here, Move On...
On Wednesday, 17 April 2013 I queried "What Should The US Do If One Of The Biggest Banks In Ireland Blatantly Defrauded US Investors?" In such query, I levied some heavy accusations at the Bank of Ireland. Its worth a read if you haven't done so already. Well, two months later, I read in the Irish Independent the following: Internal probe at Bank of Ireland
AN inquiry is under way within Bank of Ireland's private banking division, as the bank's internal auditors investigate what have been described as "possible irregularities".
The Sunday Independent has learned that Bank of Ireland's auditors have been inside the division, which counts many of Ireland's most wealthy and powerful individuals among its clients, at various stages over the past six weeks, conducting what one source described as a "thorough examination" of its activities.
Hmmmm. Now, that's interesting. Six weeks ago would have been about two weeks after I dropped my bomb of a scorching missive on sheeple who are to this day, much too trusting of the banking system. That two weeks is just about the amount of time it would have taken a big corporation to act on the information that I levied (if it was in a rush). Wholly a coincidence, I'm sure!
The bank's audit team is seeking to establish if any of its private banking clients' affairs have been handled in any way improperly.
The bank's management is understood to be treating the matter "very seriously". Commenting on this, one well-placed source said: "The investigation isn't complete yet. It's difficult to say when it will be complete. We are obliged to follow due process before we come to any conclusions."
Asked if Bank of Ireland had brought in any third parties to assist with the investigation or if it had made contact with gardai even on a preliminary basis, the source said: "No, the matter is being dealt with internally and all appropriate procedures are being followed.
... The source stressed that clients of the division that is under investigation would be notified immediately in the event that the bank uncovered any evidence to show that their affairs had been inappropriately managed.
I have to be honest, I hate it when people ask me for free advice. After all, if my advice/opinion/knowledge was thought to be worth something, then people ought to act like it, no? Well, methinks one should make an exception to the rule this one time and offer some free advice to the "internal audit team" at the Bank of Ireland. I know, I know... Nobody asked me, but since they haven't bothered to bring in any third parties yet, why not invite myself and crash the party?
Let's, once again, reference my post from two months ago - What Should The US Do If One Of The Biggest Banks In Ireland Blatantly Defrauded US Investors? wherein I will update the ADR performance chart for the bank if Ireland.
As you can see, there was a significant and material loss taken by ADR holders during the time in question at BoI. But, following the auspices of this story in the Independent, yet using our BoomBustBlog investigative resources, there's much more here than meets the eye. A document that I made available to professional/institutional subscribers details how the Bank of Ireland sought and received an exemption from SEC rule 102 of Regulation M (click here to brush up on your US securities law). In short, this exemption allowed the bank to literally trade in its own securities, provided it wouldn't abuse the privilege. See an excerpt below...
bank-of-ireland-060711-1-4 Page 01
bank-of-ireland-060711-1-4 Page 02
This letter worked literal wonders for the Bank of Ireland stock within days of being issued. Even more miraculous is the fact that it wasn't public information at the time yet the public somehow knew to bid the shares up by nearly 100%. Hmmmm! Coincidence, eh?
Even more damning is the fact that the alleged historical trading volume in the shares in question (a pertinent fact used as an argument to get the Reg M exemption in the first place) spiked by nearly 5X!!!
...Bank of Ireland Private Banking is, according to its website, "Ireland's largest and oldest private bank. The country's leading entrepreneurs, business leaders, professionals and families trust us to manage their wealth with discretion and integrity."
If the private banking client's capital was used to churn these shares, then.... Oh Boy~~~
Per Wikipedia: Market manipulation is a deliberate attempt to interfere with the free and fair operation of the market and create artificial, false or misleading appearances with respect to the price of, or market for a security, commodity or currency. Market manipulation is prohibited in the United States under Section 9(a)(2)[1] of the Securities Exchange Act of 1934, and in Australia under Section s 1041A of the Corporations Act 2001. The Act defines market manipulation as transactions which create an artificial price or maintain an artificial price for a tradable security.
Examples
- Churning: "When a trader places both buy and sell orders at about the same price. The increase in activity is intended to attract additional investors, and increase the price."
If the stock was churned, the price would have increased temporarily until the performance numbers of the loss making bank would have came to fore. But then again, what would management have to gain by manipulating the stock in such fashion. After all, bankers aren't incentivized or measured by share prices, bonuses, year and reviews, etc., right???
I have released information that has apparently caused quite a bit of high level C-suite types to head for the hills, reference BoomBustBlog Hard Hitting, Bleeding Edge Research Results In 2nd High Level Ouster/Resignation In The UK & Euroland.
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.
Those of you in Ireland who may not want to get "Cyprus'd", ie. have your bank accounts fund another bailout, should contact the Office of the Director of Corporate Enforcement. Click this link, and tell them Reggie from NYC sent 'ya. Seriously! The reason why Irish banks haven't been reformed was because not enough light has been shown on the activities. See a valid attempt at such here. This is the time, for the tea leaves foretell the next bank collapse & bailout will be funded directly out of your bank accounts, reference Ireland, You May Very Well Be Bust & I Make No Apologies For What I'm About To Show You for those who don't believe me. See Global Banking Crisis - How & Why YOU Will Get "Cyprus'd" for an example of a bank statement of a Cypriot who didn't take the regulation of his bank seriously!!!
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Right again, Reg! So the SEC thinks that the BoI should be allowed to trade it's own securities, "provided it would not abuse the privelege"? WTF are they snorting in these "financial" institutions? WTF else would the SEC expect, but that BoI would "churn"? Holy crap, WE get to bail these fuckers out? BoI, SEC, GET THE FUCK OFF OF MY PLANET!!
Not a lawyer, but if you believe they have committed fraud, might one also file Qui Tam fraud suits at the federal and state level (Federal False Claims Act and Violation of State Banking Laws)? They must be licensed in the State of New York since they have a NYC office, right?? Have a lawyer friend look into it. You could get some gravy for what you have discovered.
Reggie,
A quick look on the BoI website shows they have Branch representation in Stamford, CT and an office in NYC. Here's a copy from their website posted for Fair Use:
"
Branch and Representative OfficeBank of Ireland re-established its US Financial Services presence in 1999. That presence has increased since then to approximately 90 professionals working throughout the US. Bank of Ireland obtained a US Banking License in July 2006 and commenced operations as a branch in Stamford Connecticut in October 2006. In addition, Bank of Ireland established representative offices in New York City and Chicago in 2008.
Bank of Ireland is a diversified Financial Services Group, which was established in 1783 by a Royal Charter. Today, Bank of Ireland employs c.13,200 in 5 countries worldwide and is listed on the Irish, London and New York (as ADR) Stock Exchanges. Figures as at Dec 2011.
Bank of Ireland is committed to offering a strong and diversified range of products in the US. Bank of Ireland also aims to build quality, long-term relationships by delivering consistent and timely financing solutions for it's customers. Bank of Ireland's teams combine a breadth of financing products, tailored to the US markets, backed up by the capital and resources of a global financial institution in the following specialised fields:
For any queries relating to our US based Corporate and Treasury divisions and services please do not hesitate to contact me.
Tony Dunne
US Country Manager
Bank of Ireland
300 First Stamford Place
Stamford, CT 06902
Tel: +1 203-391-5900
Email: tony.dunne@boius.com
"
If they have an NYC office then they must be licensed in the State of New York. If licensed in the State of New York, there should be remedies at the State level. After all, these off-shore anomalies have a bearing to US investors and citizens of the State of NY. If you could find a lawyer willing to pursue the case, you could file a Qui Tam suit against BoI as defrauding investors is tantamaount to defrauding the state (since income is taxed here). PM me as I would like to be a party to the Qui Tam suit should you decide to go that route.
when I lived on the Gulf Coast in Florida we used to call this chumming for fish. Grind up some smelly fish and drop it in the water and wait on the fish to show up as well as some sharks. This banking scam thing sounds similar.
"possible irregularities".
IMPOSSIBLE !
Something else to keep in mind, since Bank o' Ireland going bonkers would be strongly associated with Irish gov debt going bonkers:
http://www.moneyweb.co.za/moneyweb-international/the-precarious-position-of-irelands-debt-holder
Franklin Templeton would be screwed.
Another Irish debt related issue:
http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt
Ireland holds a crapton of UST, particularly on a relative basis. Pullbacks in UST more dramatically hurts Ireland than most European countries.
Reggie! Reggie! Reggie!
That bank statement from the I.T. Company owner in Cyprus is devastating.
Where is St. Patrick to banish the banking snakes from Ireland?
Are the bankers kneeling in a confessional somewhere?
Doubt it.
Reggie,
Remember your lifejacket if you use the spa.
You are stepping on some serious toes.
Keep up the good work.
Way to go Reggie, very nice job .
Well, after all, they are only "irregularities"....
And what are HFT doing with their frequent quotes and requotes and millisecond trading if not churning?????