Anglo released McKillen from liability over €40m loan
SIMON CARSWELL, Finance Correspondent
ANGLO IRISH Bank has no recourse to pursue Paddy McKillen for any of the €40 million it lent him to buy shares in the bank. Mr McKillen was one of the 10 so-called “golden circle” of large customers encouraged to buy a 10 per cent stake in the bank from businessman Seán Quinn in 2008.
The bank gave loans of about €45 million to each of the 10 long-standing customers of the bank to buy the shares but only 25 per cent was on a “recourse” basis.
This meant that most of the loan – 75 per cent – was backed only by the shares they bought in Anglo so they could only be pursued personally for the remaining 25 per cent.
It is understood that Anglo reorganised Mr McKillen’s share purchase loan in the weeks following the transaction, releasing him from the 25 per cent of the loan on which he would be personally liable. This meant that unlike the other nine, he was no longer obliged to pay about €10 million due on the loan.
Mr McKillen agreed to take part in the share transaction to help protect the bank at a difficult time but on the basis that he did not profit from the transaction, according to well-placed sources.
He was one of 10 trusted customers approached by the bank in July 2008 to buy 10 per cent of the bank. The bank organised and funded the purchase to prevent such a large amount of shares being sold on the open market, a move which would have collapsed the share price at a critical time.
Full article link http://www.irishtimes.com/newspaper/finance/2010/1009/1224280699537.html
We are hearing about fraud on a massive scale here, insider trading is apparently endemic in the top echelons of Irish society .corruption is the name of the game and these people are walking away scot free!
This revelation is shocking, as I believe we are effectively hearing that Insider trading on Anglo Irish Bank stock was encouraged by the Directors of Anglo Irish and these 10 so called trusted customers were in fact a select few of the golden circle allowed to partake in this deception!.
By calling on these 10 trusted customers in this manner the bank gave an unbelievable, once in a lifetime opportunity, to the people in the know, to make millions on the stock as is falls .Yes I said as it falls by using a little know financial tool called a put option you can make an enormous amount of money as the stock falls and if you know what you are doing you can even put this financial tool on without it even costing you a penny by getting someone else to pay for it !
What is a put option? See video clip In fact this was a no lose situation because of the insider information aspect of this particular event. These guys could only make money, and it didn’t matter which way the stock went
Because a second financial tool comes to mind a financial tool was and is still available to bring about this win win situation, by using an option strategy called a straddle this was a once in a lifetime opportunity that presented itself to these individuals .I know this because I have been active in the stock markets for the past 15 years and I paid an enormous amount of money to learn how to use these financial instruments in the United States and here in Ireland
So what is a Straddle Then? Here in this video clip the Straddle is explained.
I have used this tool a number of times right before an earnings announcement particularly in biotech stocks as they make drastic moves on good or bad news. So the News is what makes this particular financial tool interesting, having insider information can make you a millionaire over night! in other words depending on what news the Golden circle had and what the Directors of Anglo Irish Bank had and the other banks had, they could have made a killing, a once in a life time opportunity to make millions . All this can be done at a push of a button.
I am not advocating anyone should take up using options or take up trading nor am I saying that the golden circle did these types of trades; I am saying they had the opportunity to do so and in the case of the bank directors they would have known about these financial tools.
My point is with specific information these guys had an unbelievable opportunity to make millions. Did they just pass on it?????
Ps Trading Options is extremely risky and only after paying thousands to learn about them will you ever hope to make back what it cost you to learn about them in the first place.
My advice stay away and keep your day job!