The Custom House Capital (CHC) false accounting and fraudulent trading scandal is a very serious matter but, unfortunately, not a rare event in Ireland.
What should be of much greater concern to the people of Ireland is how this scandal has exposed the lie that financial regulation has been reformed and is now fit for purpose.
Soviet style secrecy and obfuscation are still the principal weapons employed by the Financial Regulator to prevent even the most basic information concerning its activities being made public.
The Financial Regulator claims it carried out an investigation into CHC in 2009 and found nothing more than some supervisory, compliance and organisational issues.
It was only when an outside agent became involved, in this case a company that had bought a section of CHCs business, that the fraud was uncovered.
The failure of the Financial Regulator to detect major fraud within a company that it was, allegedly, investigating raises some very serious questions.
In my opinion there are four possible reasons for this failure in regulation.
1. There was no investigation in the first place and the Regulator is now lying to cover up its failure.
2. There was an old style, pre financial catastrophe investigation. This would involve much drinking of coffee, hours of friendly chat with an occasional glance at some minor aspect of the business under investigation and the compilation of a report that found everything was just hunky dory.
3. Financial Regulator staff are so incompetent that they failed to uncover what Appian Asset Management immediately uncovered on taking over CHCs books.
4. There was a serious investigation and serious fraud was discovered but a cover-up strategy was adopted by the Financial Regulator.
This last possibility is most likely to be the truth.
Irish citizens know, to their great cost, that it is quite common for so called regulators to cover up fraud and criminality within the financial sector.
The DIRT and Ansbacher frauds are just two of the more serious examples of this strategy.
The crucial point arising from this particular scandal is not just that white collar crime is still tolerated by state authorities but that the same old strategies of secrecy and obfuscation are being employed to, effectively, protect the guilty.