Matt Moran told the jury he was granted immunity from prosecution following discussions with the DPP and his lawyers.
He said that on July 9, 2008, he was told by one of the accused, William McAteer, that Anglo was lending money to 10 investors to buy shares in the bank.
Mr McAteer is accused, along with fellow ex-directors Sean FitzPatrick and Pat Whelan, of providing funding for the purchase of its own shares in contravention of the 1963 Companies Act.
The trial also heard evidence yesterday from former Anglo board member Declan Quilligan, who told the jury that the plan to lend to the investors, known as the Maple Ten, was designed to save not just Anglo but the entire Irish banking system.
He said nobody complained about the plan while it was happening and it was only after the bank’s nationalisation that people began to criticise it.
“The whole story wasn’t being told,” Mr Quilligan said.
The three accused have been charged at Dublin Circuit Criminal Court with 16 counts of providing unlawful financial assistance to 16 individuals in July 2008 to buy shares in the bank.
Mr Whelan has also been charged with being privy to the fraudulent alteration of loan facility letters to seven individuals in October 2008.
Mr FitzPatrick, aged 65, of Greystones, Co Wicklow, Mr McAteer, aged 63, of Rathgar, Dublin, and Mr Whelan, aged 51, of Malahide, Dublin, have pleaded not guilty to all charges.
During the prosecution evidence, Mr Moran detailed his role within Anglo and how he had “directly reported to Willie McAteer” since joining in 2002.
In September 2007, he discovered that businessman Sean Quinn controlled a large portion of the bank’s shares through investment tools known as contracts for difference.
The court has heard there could be catastrophic consequences if these contracts were not reduced.
Mr Moran said the bank went through several plans before landing on the idea to loan money to 10 trusted and high-net-worth bank customers so they could buy the shares.
The witness told prosecution counsel Paul O’Higgins that he was working on one of these alternative plans on July 8, 2008, when Mr McAteer said “the executives” had decided to approach 10 clients about the deal.
When asked who he meant by executives, he said he meant David Drumm, Pat Whelan, Declan Quilligan, and Tony Browne.
Me Moran said the terms of the deal were discussed again the next day and it was mentioned that the 10 investors would be lent money by Anglo with 25% personal recourse.
Mr Moran said that later that day, Anglo CEO David Drumm said he had spoken to the Financial Regulator about the deal before giving a “thumbs up” gesture.
Earlier, Mr Moran agreed with the prosecution that he was himself a shareholder in Anglo, along with Bank of Ireland and AIB. He said he had borrowed from his employer on three occasions to buy Anglo shares.
He said it was his own decision to buy the shares but that on one occasion, he was “strongly encouraged” to purchase them as a sign of confidence for the markets. In summer 2007, he sold all this bank shares except for Anglo’s. He said he had been requested not to sell the Anglo shares by Mr Drumm because the market would find out.
The trial continues.