Those were the days: David Drumm and Sean Fitzpatrick of Anglo, whose shares Sean Quinn lost around €2.5bn on through CFDs

It seemed everybody knew about the outrageous gamble that Sean Quinn, then reputedly Ireland's richest businessman, had wagered on Anglo Irish shares. Many months before the summer of 2008, a discredited Financial Regulator knew about the huge bets. Many senior people in the now nationalised bank knew about it. Many brokers around Dublin and people whose jobs it was "to know" in the London markets knew about it and some of the stockbroker firms were pumping up their profits on the same stock market bets that Sean Quinn was using.

People who bet against big positions like the one held by Sean Quinn knew about his huge position in a single stock. David Drumm, the former Anglo Irish chief executive, in March 2008 complained about the short sellers, blaming the St Patrick's Day slump on a supposedly small band of mystery short sellers. He would have known about Sean Quinn's position and the exposure to Anglo Irish shares.

The reason so many people in Ireland and Britain knew about Quinn's stake-building in Anglo Irish was because the size of the bet was so huge that anybody who was anybody in the financial markets, regulators in Dublin and London, had to have known about it.

The bet by a single individual on a single share was, we now know, among the world's largest losing bets wagered using contracts for difference (CFDs) in the history of world stock markets. The secretive bets may not need to be reported on any stock market regulatory news bulletin but at an early stage – well before the summer of 2008 -- it was widely known that Sean Quinn had built a shareholding indirectly in Anglo Irish. Only the financial market players in London and Dublin could guess that the stake was absolutely huge. "Everybody heard about it. I knew in late 2007 that he had a sizeable stake," said a leading London broker, who spoke on the basis of anonymity.

There were only two groups of people who did not know about it. Apparently, senior politicians did not know about it. And, of course, Irish taxpayers for sure did not know about it because they were the ones who had to pick up the bill for Sean Quinn's gambling bets.

He is one of the largest borrowers of Anglo Irish, the bank which is likely to suck up €22bn in taxpayers' cash before the crisis ends. Sean Quinn owes Anglo Irish €2.8bn because of the legacy of the €2.5bn loss he made in betting on Anglo Irish shares. The knock-on effects of that record-losing streak carried through to last week: the difficulties facing Quinn Insurance, now in administration, and the wider Quinn Group which employs thousands of people across Ireland, are intimately intertwined.

Sean Quinn has disclosed that he and his family lost €3bn on stock markets 20 months ago. The largest part ? €2.5bn ? he lost betting through CFDs, which, despite popular belief, were a simple gamble that the Anglo Irish share price would continue to soar. In mid-summer 2008, when the deal was struck to convert the greater part of Sean Quinn's open CFD exposure directly into Anglo Irish shares, Sean Quinn was already hopelessly in the red.

At the start of July 2008, Anglo's shares were still trading at just over €4 each. With 769 million shares in issue, the bank, which was to become worthless, was still valued by the market at just over €3.1bn. The Sunday Tribune estimates that Sean Quinn, before losing his remaining Anglo investment when the bank was nationalised, had already lost €2bn on his CFD position.

The scale of the stock market bet remains unimaginable to many outside Ireland. As the Sunday Tribune has reported, Sean Quinn's loss is the largest ever recorded by any individual using CFDs in the world. Histories of the recent stock market and banking crash will show that Sean Quinn's overall losses will be among the most significant in the world, leading historians of the stock markets have said. David Buik of the financial broker Cantor Fitzgerald, has said that the CFD loss was "undoubtedly" the largest amount dropped in the history of CFDs and could not easily be understood. David Schwartz, the markets historian, said Sean Quinn's overall losses were "eye-watering".

Assuming the CFD was built in normal fashion, Sean Quinn would have needed to put up about €10m in cash for each €100m worth of shares he bought in Anglo Irish. The so-called 10% margin was put into the nine brokers accounts he had dealings with. When the Anglo Irish price fell he faced paying a variation margin, or cash call, to preserve the 10% margin.

His CFD broker or bank would have bought the equivalent number of shares in the market. But Sean Quinn would also have had to pay for the funding cost of the CFD position – that is paying for the cost of funds of buying 90% of shares when he has only put up 10% of the cost of the shares. During the boom, it was a very profitable business for Dublin and London brokers. The broker was paid a commission to buy the shares, ranging between 0.25% and 0.5%. The CFD broker or bank would also charge a CFD holder like Sean Quinn for the funding costs of holding the 90% of shares that he had not paid for. Sean Quinn would have been charged a rate of 2% above Libor. The longer the CFD rolled the longer his brokers were pocketing the 2% funding margin.

But a senior CFD expert in London believes that the size of the Sean Quinn position in Anglo Irish was so large that his brokers would have demanded, as the Anglo Irish share price started to slide, a margin of up to 25%. As early as 2007, Sean Quinn was likely to be facing substantial funding costs and cash calls on his losing position, as the brokers sought greater protection.

"After losing his first €1bn he would have been reluctant to close it because selling such a large CFD contract means that he would have effectively triggered share sales and depressed the market price against himself by encouraging a run on Anglo Irish. Anyway, by 2008, he could not have got out because few wanted to buy Anglo Irish shares by then," the expert said.

In the good times, the Quinn Group fed selected journalists with stories of the Quinn Group's plans for spending sprees and plans to invest billions in hotels and commercial properties across the continent and into Russia.

Sean Quinn at the top of the boom for whatever reason bet big and recklessly hoping that Anglo Irish shares would continue to soar. The circumstances of that gamble need now to be examined. It should be at the centre of the Klaus Regling and Max Watson banking inquiry if the investigation by the German and Englishman is to have any credibility with Irish taxpayers. But the legacy of the gamble remains in the €2.8bn Sean Quinn and his family owe the taxpayer-supported Anglo Irish.

In two full-length interviews on RTE television and in a brief phone-in to Prime Time, Sean Quinn has never given an explanation for his CFD losses. A spokesman for Quinn last week said that Quinn had acknowledged that the CFD gamble was a mistake and that the businessman "took full personal responsibility" for the losses.

The problem is that the scale of the bet leaves unanswered questions. His CFD loss has been presented as something normal in stock market dealings when in fact it was extraordinary. An experienced businessman will end up in world history as the man who lost the most ever in CFD bets.