Irish court convicts two Anglo Irish bankers of illegal lending

By Sarah O'Connor DUBLIN (Reuters) - A Dublin court found two former executives of the collapsed Anglo Irish Bank guilty on Thursday of illegal lending and providing unlawful assistance to investors during the "Celtic Tiger" boom of the past decade. Willie McAteer and Pat Whelan were judged guilty on 10 counts of illegal loans to clients known as the "Maple Ten". They were found not guilty on six other charges of illegal loans to the family of businessman Sean Quinn, once Ireland's richest man and now bankrupt. Judge Martin Nolan said that he would consider the arguments for sentencing Whelan and McAteer on April 28 but that he was unlikely to give a decision until later. The maximum sentence on each charge is five years, a 3,000 euro fine or both. The trial had been seen as a landmark in Ireland, where Anglo Irish became synonymous with the casino-style lending practices that drove the "Celtic Tiger" boom and subsequent bust that pushed the state to the brink of collapse in 2010. Former Anglo Irish chairman Sean FitzPatrick was found not guilty of the same charges on Wednesday in the first such case since Ireland was rocked by a banking crisis six years ago. The three men were accused of providing loans to the Maple Ten and to the wife and five children of Quinn in 2008 to enable them to buy shares in the bank, boosting its stock price. The verdict against former finance director McAteer and Whelan, who was head of lending for Ireland, came after five days of deliberations. Unlike FitzPatrick, they were executive directors at the bank when the transaction took place. JUDGE PRAISES JURY McAteer and Whelan did not react as the verdict was read out, both looking straight ahead and then leaving the courtroom. "Obviously you had to weigh up many considerations, I thank you for your verdicts," Judge Nolan told the jury. "I think you've been a credit to the jury system." The three former executives had been accused of providing loans of about 625 million euros (514.90 million pounds) to bank clients to enable them to buy shares in Anglo, unwinding a derivatives position in the bank held by Quinn. The loans were used by the customers, including Quinn's wife and five adult children, to buy shares in the bank. The Quinns were unwinding a stake of as much as 29 percent in Anglo Irish built up via contracts for difference (CFDs), which do not have to be publicly declared. The bank's management had feared a disorderly unwinding of the CFD position would put the bank in jeopardy. Quinn's family then bought a 15 percent stake and the Maple Ten clients took a 10 percent stake. The judge said in his view, Ireland's financial regulator - which has been overhauled in recent years after failing to keep a lid on wild lending during the boom years - had been aware of substantial parts of the scheme. "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 financial regulator witnesses that they were somewhat relieved when the scheme went through and that the CFD issue was alleviated and regularised," Nolan said. FROM BEST-PERFORMING BANK TO COFFEE SHOP Oliver Wyman, the consultancy working with the European Central Bank on this year's health check of lenders, had crowned Anglo Irish the world's best-performing bank in 2006 but its fall from grace was rapid and spectacular. It concentrated its business on Irish property developers, many of whom gave personal guarantees as security on huge loans. Many clients went bust and in 2010 the bank recorded a loss of 17.7 billion euros, the biggest in Irish corporate history. Its planned new offices by the River Liffey now stand as an empty shell scarring Dublin's docklands development, waiting to be finished for the central bank to move in. Its former headquarters now house a branch of U.S. coffee chain Starbucks. The 10-week trial failed to capture the public imagination as it focused on a narrow set of loans, rather than the wider issues of the lender's collapse, until FitzPatrick's acquittal dominated newspaper front pages on Thursday. Anglo Irish stock became worthless once the government took over the bank in 2009, leaving the Quinn family with debts to the bank of almost 3 billion euros and decimating their business empire, which had stretched from insurance to cement. (Writing by Sam Cage; Editing by Tom Heneghan)