Two former Irish bankers face jail terms for hitting secret deal to save lender
Two former executives of Anglo Irish Bank Corporation, which came to symbolize Ireland's boom to bust hung in the balance, are facing prison terms of up to five years for the secret deal that they had hit to save the lender at the peal of economic crisis in 2008.
Anglo's former head of Irish lending Pat Whelan and finance director Willie McAteer have already been convicted and the duo is now face a sentencing hearing for using an illegal way to unwind a secret stake controlled by then-billionaire Sean Quinn without a fall in the lender's shares.
Sean Quinn had a secret stake of around 28 per cent in the bank. To unwind the stake without a collapse in the shares of the bank, 52-year-old Whelan and 63-year-old McAteer decided to offer a massive set of loans to clients (called "heroes" within the bank) to purchase the stake and stop it hitting the volatile market.
But, the secret deal ultimately proved to be a doomed effort to avert financial calamity.
Following a ten-week trial, a jury reached the conclusion on 17th of April that 450 million euros (US$623M) of loans to ten customers broke the law.
Justin O'Brien, a marketing experts from the University of New South Wales and a visiting professor at University College Dublin, said, "It's talismanic of a wider cultural and structural problem. What this trial really does is expose just how corroded the system had become."
Anglo allowed investors to bet on a share price by just putting up an initial deposit and without any requirement of informing the market.
The jury, however, acquitted the bank's former chairman, 65-year-old Sean Fitzpatrick, before finding McAteer and Whelan guilty.