By EAMON QUINN
DUBLIN--The judge presiding over the high profile trial of
former officers at Anglo Irish Bank Corp. instructed the jury
Friday to put aside any burning prejudices they may hold against
bankers in deliberating their verdict, after sitting through almost
10 weeks of evidence and testimony.
Anglo Irish is the now-liquidated lender involved in Ireland's
disastrous banking bust. The trial of the former officers, now in
its 10th full week, is already among one of the longest heard by an
Irish criminal court.
The jury, which retired to begin deliberations Friday, may
deliver its verdict early next week.
Three former senior Anglo executives are accused of illegally
providing bank funds to help unwind a huge derivative position in
an attempt to halt a rout of the bank's shares in 2008. That huge
position, called contracts for difference, or CFDs, were amassed by
a major business customer, Sean Quinn, from 2007.
Judge Martin Nolan said Friday that Anglo Irish was "the most
famous" bank in the country, but that the jurors must leave any
prejudices at the courtroom door they may hold "for or against
bankers" and their responsibility for Ireland's "financial
calamity."
Sean FitzPatrick, a former Anglo chairman, has pleaded not
guilty to each of 10 charges alleging he provided "unlawful
financial assistance" in July 2008 to a group of 10 long-standing
customers, known as the Maple 10, to buy shares in Anglo.
Wednesday, on direction by the judge, Mr. FitzPatrick was
acquitted of a further six charges alleging he illegally provided
loans to six other individuals. Those individuals had included Mr.
Quinn's wife Patricia and five of their adult children.
Patrick Whelan, a former managing director of Anglo in Ireland,
and William McAteer, the bank's one-time finance director, had also
pleaded not guilty in late January to each of 16 counts alleging
they allowed Anglo to give unlawful financial assistance in July
2008 to 16 individuals, including the Maple 10 and the six Quinn
family members. They continue to face all 16 charges. Mr. Whelan on
Wednesday was acquitted under direction of the judge of other
separate charges.
Judge Nolan detailed Friday how the bank had first learned in
late 2007 that businessman Mr. Quinn had built a huge derivative
CFD position on Anglo that threatened to further undermine the
bank's shares. The CFD position gave Anglo a serious problem "not
of their own making," the judge said.
The bursting of Ireland's property-market bubble in 2007 exposed
Anglo, as well as five other Irish lenders, to huge losses. Its
position deteriorated as the global credit crunch worsened through
2008.
As the Anglo shares continued to slide, the bank had hired
Morgan Stanley in London to advise on ways to unwind the CFD
position. By June 2008, the bank had become "desperate," and
eventually, in July 2008, a transaction was executed to unwind the
precarious CFD holding by lending to the Maple 10 and the Quinn
family members, Judge Nolan said.
Former top Irish banking regulators, a former top Irish finance
ministry official, a banking expert, most of the Maple 10
borrowers, and, by video link, Morgan Stanley investment bankers in
London--an adviser to Anglo Irish which had helped unwind the CFD
position in July 2008--have given evidence during the course of the
marathon trial about events in 2008.
Judge Nolan told the jury that, to convict, they must agree that
Anglo had advanced to the Maple 10 and the Quinn family more than
EUR600 million in loans for the purpose of stabilizing Anglo shares
and that the three defendants hadn't taken any steps to stop it. He
said "as a matter of law" that the roles played by the financial
regulator and Morgan Stanley and any legal advice that was provided
to the bank about the CFD unwinding was "totally irrelevant" to the
case. Defense counsels for all three defendants had told the jury
over recent days that there was clear evidence that the Anglo loans
were legal and done in the ordinary course of business as allowed
under Ireland's Companies Act.
Judge Nolan said however Friday that it was "very difficult to
see" how Anglo could have advanced "these monies" in the ordinary
course of its business.
To safeguard against absence through illness, the court at the
start of the trial, in late January, had sworn in a panel of 15
jurors, an unusual practice in Irish courts. One jury member had
voluntarily stepped down during the trial. Following a ballot
Friday that excluded two further members, 12 jurors will now decide
the guilt or innocence of the three former Anglo officers.
Anglo was nationalized in January 2009 and liquidated early last
year. Ireland sunk around EUR30 billion into Anglo, accounting for
about half of all the money Irish taxpayers were forced to inject
into the banking system in the last six years.
Ireland's bank-rescue costs were among the largest faced by any
country during the crisis.
The trial was brought after a five-year investigation by Irish
police and has attracted a large public following.
Write to Eamon Quinn at eamon.quinn@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires