2017-12-13motherjones.com

Earlier this year, Luke Ming Flanagan, an Irish politician and member of the European Parliament, the European Union's governing body, commissioned a report on the 2008 eurozone banking crisis. The final version of this report, written by two Irish financial analysts, was presented in Brussels last week to a group of 52 European Parliament members affiliated with left-leaning parties. And it included a section covering Ross' investment in the Bank of Ireland, in which he was a major shareholder and a member of the board of directors. The report alleges that when Ross sold off his holdings in the bank for a massive profit in 2014, he possessed inside information that the bank was relying on deceptive accounting practices to mask its losses and embellish its financial position.

Ross' involvement with the Bank of Ireland began in July 2011, when his hedge fund, WL Ross & Co., joined several institutional investors to purchase a 34.9 percent stake in the struggling financial firm for 1.12 billion euros ($1.6 billion). At the time, the deal "led to much head-scratching," according to the Irish Examiner. That's because Ross and the other investors obtained stock in the company at the low price of 10 euro cents a share just months after the bank received a 3.5 billion euro bailout from the Irish Central Bank and a guarantee of up to 10 billion more. (The bank's shares were trading at about 30 euro cents two months before the sale.) The Irish government's decision "to sell a large chunk of Bank of Ireland at the bottom of the market" so soon after the government's cash infusion had stabilized the institution "was on the face of it baffling," the newspaper reported.

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Ross sold near the top of the market. Since the 2015 admissions that the Bank of Ireland relied on flawed accounting methods, the bank's share prices have dropped significantly. Yet as a board member, Ross would have presumably been privy to the bank's most sensitive financial information, including its bookkeeping practices. This raises the question of what Ross knew when he sold off his shares. Was he aware that the losses the bank was deferring using flawed accounting would inevitably reappear and that he could get out of the company before the true state of its finances became clear?



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