When it finally came, it was a surprise. There had been mutterings from the garda specialist unit on Harcourt Street in Dublin that the overtime ban was slowing the investigation into various activities in Anglo Irish Bank. And then last week they swooped on Sean FitzPatrick, the charismatic former chairman and chief executive of the now nationalised bank. A single squad car drew up to his house at 6.30am on Thursday morning, a garda source said, and took FitzPatrick to Bray garda station where he was questioned until almost 2pm on Friday. He was released without charge and the gardaí said they are preparing a file for the DPP.

As first reported in the Sunday Tribune, it was originally planned to arrest about five employees of Anglo Irish early one morning before the end of February. A particular focus of that investigation was on loan documentation held at the bank which gardaí wanted to compare to copies of the same documents held by solicitors. It was later decided that the garda investigation, led by Assistant Commissioner Derek Byrne, would complete its inquiry by the middle of April with a file being sent to the Director of Public Prosecutions.

Subsequently, the Irish Times reported that the investigation into practices at Anglo Irish Bank was "unlikely" to result in any criminal charges or arrests in the short to medium term. FitzPatrick was arrested less than three weeks later.

Senior bankers in Anglo are also understood to be surprised by the length of time the investigation has been taking and believe the investigation could and should have been concluded months ago.

Government reaction has been muted. Finance minister Brian Lenihan, who was informed of FitzPatrick's arrest soon after it occurred early on Thursday morning, said he was eager to see justice take its course.

"I have always stated that there is an extensive garda investigation underway. I have been cautious not to prejudice that investigation and am eager to see justice take its course."

A spokesman for the department had no additional comment to make and referred further queries to the gardaí.

According to regulatory sources, the "alleged financial irregularities" under investigation in the Sean FitzPatrick case could include market abuse. Market abuse can either be insider trading or manipulation of financial instruments, such as shares in a listed company. FitzPatrick has always insisted that he did not breach banking or legal regulations.

The Financial Regulator can impose a fine of up to €2.5m for market abuse breaches, plus the costs of the investigation, and disqualify directors from being involved in financial services. The maximum sanction for a criminal conviction for market abuse is a €10m fine and/or imprisonment up to 10 years. Anglo has already been billed nearly €2.8m for costs associated with regulatory investigations.

The Financial Regulator sent a report on Anglo Irish Bank to An Garda Síochána in February 2009 after officials "concluded that certain matters [were] of such a serious nature that it was appropriate that they be referred to the gardaí". The regulator's investigations are still ongoing.

According to a statement by the Financial Regulator last week the objectives of the ongoing investigations are:

• To ascertain details of all loans provided by Anglo to current and former directors and connected parties;

• To consider if individuals within the bank were key to the provision and management of the directors and related party loans;

• And to identify potential breaches of the regulator's requirements, other regulations and Anglo Irish Bank's own internal governance and policies.

It is understood the file sent by the regulator to the gardaí included information on Anglo directors and executives other than FitzPatrick. Gardaí have said further arrests are expected in the case.

There have also been calls from opposition politicians for the Office of the Director of Corporate Enforcement to push for criminal charges.

"I think it is essential that both the Director of Corporate Enforcement and the Director of Public Prosecutions act on what, on the face of it, appears to be a breach of the criminal law," Fine Gael justice spokesman Charlie Flanagan told the Law Society Gazette this month.

The Garda/ODCE investigation

There are three main issues under investigation at Anglo

1) The Golden Circle share transaction in which 10 clients of the bank purchased 10% of the bank's shares using loans from the bank. The stake was bought from businessman Sean Quinn.

2) Hiding directors' loans from shareholders – including FitzPatrick's – by transferring them for short terms to Irish Nationwide at year-end. FitzPatrick insists that this did not breach banking or legal regulations but admits it was inappropriate and unacceptable from a transparency point of view.

3) The lodgement of €7.45bn in short term deposits by IL&P to the nationalised bank in September 2008.

Anglo: timeline

17 March, 2008: Anglo Irish shares plunge; Financial Regulator launches investigation into trading patterns in its shares

31 March, 2008: Irish Life & Permanent deposits €750m with Anglo after receiving €1bn from the bank as collateral

15 July, 2008: Sean Quinn announces that he is unwinding his contracts-for-difference in Anglo and he and his family will take a 15% stake in Anglo ordinary shares

26-29 September, 2008: IL&P deposits a total of €3.45bn with Anglo in several tranches after accepting €3.45bn as collateral

30 September, 2008: Government announced deposit guarantee scheme. Irish Life & Permanent deposits €4bn with Anglo after receiving €4bn in collateral

18 December, 2008: Sean FitzPatrick resigns as chairman of Anglo Irish Bank. Says temporarily moving his loans to Irish Nationwide Building Society didn't breach banking or legal regulations

19 December, 2008: David Drumm resigns as Anglo Irish chief executive

21 December, 2008: Finance minister Brian Lenihan says he will inject capital into Anglo Irish, AIB and Bank of Ireland

15 January, 2009: Government nationalises Anglo Irish Bank

24 February, 2009: Gardaí search Anglo head office

29 May, 2009: Anglo reports pre-tax loss of €4.1bn for half year; government announces €4bn capital injection

18 August, 2009: Anglo Irish announces that Australian Mike Anysley will be its new chief executive

16 September, 2009: Finance minister Brian Lenihan says Anglo will transfer loans of €28bn to Nama

11 March, 2010: Anglo Irish says it will pursue Sean FitzPatrick through courts to recover loans

12 March, 2010: Donal O'Connor resigns as Anglo chairman, replaced by Alan Dukes

18 March, 2010: Sean FitzPatrick arrested by gardaí at his home in Greystones, Co Wicklow