An important application should be made as soon as the litigation is launched; it will be for an injunction pursuant to Section 55 of the Company Law Enforcement Act 2001.

If successful, it will preserve the assets, for the benefit of the plaintiffs, of any director or officer of the company who is a defendant in the proceedings.

Under the Market Abuse (2003/6/EC) Regulations 2005 it is an offence to breach the regulations by engaging in the acts set out in Regulation 5. It provides:

5. (1) Subject to paragraphs (4) and (5) and Regulations 8(2) and (4) and 9(1), a person to whom this paragraph applies who possesses inside information shall not use that information by acquiring or disposing of, or by trying to acquire or dispose of, for the person’s own account or for the account of a third party, directly or indirectly, financial instruments to which that information relates.”

To understand this it is necessary to look at the definition of Insider information and market manipulation:

“inside information” means -

(a) information of a precise nature relating directly or indirectly to one or more issuers of financial instruments or to one or more financial instruments which has not been made public and which, if it were made public, would be likely to have a significant effect on the price of those financial instruments or on the price of related derivative financial instruments,”

“market manipulation” means -

(a) transactions or orders to trade –

(i) which give, or are likely to give, false or misleading signals as to the supply of, demand for or price of financial instruments, or

(ii) which secure, by a person, or persons acting in collaboration, the price of one or several financial instruments at an abnormal or artificial level,

unless the person who entered into the transactions or issued the orders to trade establishes that the person’s reasons for so doing are legitimate and the transactions or orders to trade, as the case may be, conform to accepted market practices on the regulated market concerned,”

Unless the transaction whereby Sean Quinn’s CFD position was “unwound” (whatever that means) is justifiable by reference to legitimate reasons or accepted market practices, then the transaction appears to have been in breach of Regulation 5 (1) of the Market Abuse (2003/6/EC) Regulations 2005.

There is a potential remedy (under Section 33 (1) of the investment Funds, Companies and Miscellaneous Provisions Act 2005), accruing to any aggrieved shareholder to recover, in a derivative action, any profit made by a party or parties to the transaction.

Of course, given that the major benefit of Sean Quinn’s CFD interests was to avoid reporting his stake-building to the regulator, and given that Anglo Irish Bank knew or learned of his interests (as did the Central Bank, the Regulator, the Taoiseach and the Minister for Finance), the very interesting question is this; who were the “vendors” of the 10% of the shares of Anglo Irish Bank?

Or the 15%, for that matter?

What was the size of that profit?

To whom did it accrue?

It is essential to make the correct strategic decisions for the forthcoming litigation.

By far, the most attractive basis of claim for a former shareholder is one of Fraudulent Trading.

The cause of action springs from the terms of Section 297A of the Companies Act 1963. (Inserted by Section 138 of the Companies Act 1990).

The section provides:

297A.—(1) If in the course of winding up of a company or in the course of proceedings under the Companies (Amendment) Act, 1990 , it appears that—

( a ) any person was, while an officer of the company, knowingly a party to the carrying on of any business of the company in a reckless manner; or

( b ) any person was knowingly a party to the carrying on of any business of the company with intent to defraud creditors of the company, or creditors of any other-person or for any fraudulent purpose;

the court, on the application of the receiver, examiner, liquidator or any creditor or contributory of the company, may, if it thinks it proper to do so, declare that such person shall be personally responsible, without any limitation of liability, for all or any part of the debts or other liabilities of the company as the court may direct.”

It has been established in case law that it is not necessary to prove a course of dealing to establish the liability; one transaction is sufficient.

Better still, the claim can be maintained against anybody, not just directors or employees of the target company. (“…was knowingly a party to the carrying on of any business of the company …for any fraudulent purpose”.

What proceedings are available under the Companies (Amendment) Act 1990? It provides, in Section 2, for the appointment of an Examiner to a company.

Section 2 provides:

2.—(1) Where it appears to the court that—

( a ) a company is or is likely to be unable to pay its debts, and

( b ) no notice of a resolution for the winding-up of the company has been given under section 252 of the Principal Act more than 7 days before the application hereinafter referred to, and

( c ) no order has been made for the winding-up of the company,

it may, on application by petition presented, appoint an examiner to the company for the purpose of examining the state of the company’s affairs and performing such duties in relation to the company as may be imposed by or under this Act.”

Here again the Minister for Finance can be of assistance. He can confirm that Anglo Irish bank is unable to pay its debts. Furthermore, in the case of Anglo Irish Bank an application can be made to the High Court only by the Central Bank. Section 3 of the Companies (Amendment) Act 1990 provides;

3.—(1) Subject to subsection (2), a petition under section 2 may be presented by—

( a ) the company, or

( b ) the directors of the company, or

( c ) a creditor, or contingent or prospective creditor (including an employee), of the company, or

( d ) members of the company holding at the date of the presentation of a petition under that section not less than one tenth of such of the paid-up capital of the company as carries at that date the right of voting at general meetings of the company,

or by all or any of those parties, together or separately.

( 2 ) ( a ) Where the company referred to in section 2 is an insurer, a petition under that section may be presented only by the Minister, and subsection (1) of this section shall not apply to the company.

( b ) Where the company referred to in section 2 is the holder of a licence under section 9 of the Central Bank Act, 1971 , or any other company supervised by the Central Bank under any enactment, a petition under section 2 may be presented only by the Central Bank, and subsection (1) of this section shall not apply to the company.”

No doubt the Central Bank, having a bad record to date in relation to its duties, will be only too anxious to make the necessary application to the High Court. Otherwise entitlements of the former shareholders in Anglo Irish Bank will be seriously impaired and rendered, possibly, nugatory and, conversely, wrongdoers will escape with impunity.

No official reports are to hand and yet we now know a great deal of pertinent information about the Anglo Irish Bank scandal.

It is now possible to see the shape of appropriate litigation.

There is a possible obstacle however, in the form of the Minister for Finance. Under the terms of Section 9 of the Anglo Irish Bank Corporation Act 2009, where a right to issue proceedings springs from, effectively, the passing of the Act, that right cannot be exercised without the prior consent of the Minister for Finance.

The Anglo Irish Bank “shareholders” are all “former shareholders”; the shares of the Bank have been transferred to the Minister. Logically, no rights to issue proceedings by former shareholders against proposed Defendants can arise from the expropriation of the shares by the Minister for Finance, but it would be foolhardy to sue without first writing to the Minister and obtaining his consent to issue proceedings, seeking civil remedies.

He has publicly stated he has no wish to shelter anybody from the criminal and civil consequences of their actions or failures. He presumably will readily give his consent to the bringing of civil proceedings, therefore.

Any contemplated proceedings must be considered as being, inter alia, a derivative action. In other words, that Anglo Irish Bank is made a defendant. This is necessary where the breach of duty was to the company.

There is another reason to write to the Minister for Finance; it lies in the terms of Section 251 of the Companies Act 1990.

He should be asked to confirm that “…the reason, or the principal reason, for its not being wound up is the insufficiency of its assets”.

This would make it easier to demonstrate that proposition to a court, and the Minister is better positioned to state this fact than any former shareholder.

That’s why the letter should be written to him.

The latest edition of the Garda Guide has been published. The Guide is a compendium of the Criminal law of Ireland.

It is an invaluable book. Alas, it is no longer a book; it consists of two heavy volumes of loose leaf pages, capable of being updated. It is also available on CD.

I was unable to answer the following question by referring to the Guide; what offence, if any, would be committed by the Dog Poop Girl if she were to visit Dublin’s Luas or Dart?

Is this a fair test of the Guide? I don’t think so.

I should be satisfied to discover that if she were to sing a profane, indecent or obscene song or ballad to the annoyance of the passengers, she would commit an offence under Section 14 (12) of the Dublin Police Act 1842 (5 and 6 Vic. C. 24).

According to the Guide, she could be arrested, without warrant, by any Garda, conditional on her committing the offence in view of the Garda.

It would be a feckless offender indeed who would persist in singing despite seeing the Garda (a Garda is in the view of an offender, if the offender is in the view of the Garda?).

The Guide is the kind of production that can be judged only with considerable use and time. It will get the benefit of both; all previous editions have been best-sellers and the time lag between editions has been always too long.