Patrick Whelan, Anglo’s former head of lending, and William McAteer, its former finance director, have been convicted of providing €450m worth of illegal loans to the Maple Ten group of investors as part of a share support scheme.
They were acquitted of six charges of being involved in illegally lending €169m to the Quinn family. The pair face up to five years in prison for each of the 10 charges related to the Maple Ten. However, in comments made in the absence of the jury during the trial, Judge Martin Nolan said he accepted the financial regulator’s office was aware of the arrangements. He ruled that this could not be used in the men’s defence, because illegal acts were not excusable just because the regulator was aware of it.
However, at the time, the judge hinted that if any of the men were to be convicted, he would take the regulator’s role into account as mitigation.
"I have no doubt the financial regulator knew there was going to be substantial lending into this scheme to effect it," said Judge Nolan.
"I also take the view that the financial regulator took no steps to discourage the scheme or in any way stop it. And it seems from regulator witnesses that they were somewhat relieved when the scheme went through and that the CFD [the Quinns’ contracts for difference] issue was alleviated and regularised."
The jury yesterday returned after almost 17 hours of deliberations with guilty verdicts on 10 charges levelled at Whelan, aged 51, of Malahide, Dublin, and McAteer, aged 63, of Rathgar, Dublin.
A sentencing hearing will take place at the Central Criminal Court on Monday, April 28.
On Wednesday, former chairman of Anglo Irish Bank Seán FitzPatrick was acquitted of the same 10 charges of lending to the Maple Ten group.
During the trial, the jury heard extensive evidence of contacts between the bank and the financial regulator’s office during 2007 and 2008 after it emerged the businessman Seán Quinn had a secret 25% stake in the bank and was borrowing heavily to fund his margin calls.
During his interview with gardaí, Whelan said at the time Anglo officials had a "hotline" to the regulator’s office.
The former regulator Patrick Neary gave evidence, and accepted he was told about Mr Quinn’s exposure at a meeting in 2007 with Anglo’s then CEO David Drumm, but Mr Neary said he was not told the scale of the problem. He also said emails circulated by his staff in early 2008 about the problem were not brought to his attention.
A key point of conflict centred on whether the regulator’s office knew the Maple Ten would borrow money to buy shares and if this was aired during a conference call with Mr Neary’s second-in-command, Con Horan, on July 12, 2008.
The bank’s former chief financial office, Matt Moran, said "the fact that the bank would lend to these parties was highlighted in the call". This was corroborated by notes taken by Anglo’s legal adviser from Morgan Stanley.
The Central Bank said there would be no comment from the financial regulator’s office about the issues raised.