The High Court will hear a case relating to the Central Bank of Ireland’s insider trading investigation into businessman Philip Lynch’s actions in cider maker Bulmers C&C later this month.
Mr Lynch is said to have accepted a €75,000 fine and a five-year ban from involvement with a regulated financial services firm, for breaching market abuse rules in October 2008 when he was director of C&C.
The Central Bank found that Mr Lynch had used inside information to buy shares in the company when he knew Maurice Pratt was leaving his post as chief executive.
The Sunday Times and Business Post reported that the Central Bank’s law enforcement division discovered beyond a reasonable doubt that Mr Lynch had inside information when he bought the shares on 21 October 2008.
John Dunsmore, chief executive of rival Scottish & Newcastle, replaced Mr Pratt. Mr Lynch knew C&C was in talks with Mr Dunsmore, but was unsure whether he would be appointed.
Scottish & Newcastle’s success in competing with C&C had helped depress the Irish company’s share price in 2007 and 2008. His arrival sent C&C shares up 19% as they rose from €1 to €3 the following year.
A case relating to the Central Bank’s enforcement process is due to go to the High Court on May 23, according to legal documents. The bank asks the court to confirm the sanctions it imposes.
Insider trading is when someone connected with a publicly traded company attempts to use inside or confidential information obtained as a result to profit from trading its shares.
According to reports, lawyers for Mr Lynch argued that he made no profit from buying the shares and that he had lost €833,620 in total on the C&C shares as of January 30, 2009.
There was a year-long embargo on directors selling shares they had purchased in the company.
The Central Bank found that Mr Lynch had made all necessary disclosures about his trades in C&C shares on the Irish Stock Exchange and had not attempted to conceal the trades.
Mr. Lynch, of Co Cork, is a well-known figure in Irish business. He is a former chief executive of the publicly traded IAWS and One51, and was previously chairman of An Post.