The Financial Regulator was “all over” and “raised no quibble” about transactions which fooled people about the true financial state of Anglo Irish Bank in 2008, the Supreme Court has been told.
It was accepted there was no evidence the regulator had prior knowledge of the exact nature of the transactions before they were carried out, the court was also told.
Denis Casey, the then chief executive of Irish Life & Permanent, should have been permitted to rely on the role of the regulator, the Central Bank and the Department of Finance in his trial concerning those transactions, Michael O’Higgins SC said.
Mr Casey was encouraged by the regulator to pursue the “green jersey agenda” involving Irish banks supporting each other, counsel said.
The regulator had mentioned the “green jersey agenda” during a phone call with Mr Casey and while it was accepted the parameters of the transactions involved were never spelt out, it was understood it involved the Irish banks helping each other.
The agenda involved “unashamedly” massaging key elements of balance sheets and, in the case of Anglo, boosting that bank’s corporate deposits.
The transactions involved were complex and this was not a simple situation akin to a person charged with stealing a loaf of bread, he added.
The view during the global financial crisis was that the large “pillar” banks were deemed too big to fail but not the smaller ones.
Counsel was opening the appeal by Mr Casey over his conviction for his part in a multi-billion euro conspiracy to deceive people about the true financial state of Anglo.
Mr Casey, who is attending the appeal before the five-judge court, was sentenced to two years and nine months imprisonment in July 2016 after being found guilty of a conspiracy to defraud.
A jury at Dublin Circuit Criminal Court found Mr Casey conspired with Anglo's John Bowe and Willie McAteer to engage in transactions between Anglo and ILP aimed at fooling people into thinking Anglo had received an extra €7.2bn in customer deposits.
The appeal centres on whether Mr Casey is entitled to use the role of the Financial Regulator, the Central Bank and the Department of Finance as a defence in his trial.
Mr Casey contends he authorised the transactions on the basis the Regulator was fully aware of them and they were encouraged as part of the "green jersey agenda".
That defence was not permitted after the trial judge ruled it could only be used in seeking to mitigate a sentence rather than a defence.
The trial judge also accepted arguments by the DPP that Mr Casey had produced no evidence to support such a defence.
After Mr Casey lost an appeal to the Court of Appeal, the Supreme Court agreed to hear a further appeal on a point of law of general public importance.
The core legal issue is whether or not a defence of "officially induced error" is available under Irish law to Casey.
The court will also consider, if such a defence is available under Irish law, the parameters of it and, on the evidence in this case, whether it was open to Casey.
The appeal is continuing.