April 17 (Bloomberg) -- Former Anglo Irish Bank Corp. Chairman Sean Fitzpatrick was cleared on charges that he let the lender make loans to clients so they could buy shares in the company as the country entered a financial crisis.
A jury in the Central Criminal Court in Dublin yesterday found Fitzpatrick, 65, not guilty on 10 charges of having allowed Anglo Irish to give financial assistance to clients to purchase the shares. Judge Martin Nolan last week ordered that he be found not guilty of six other charges tied to the loans.
Speaking to reporters afterward, Fitzpatrick thanked the jury for their decision and his family for supporting him “for the past six years of great personal difficulty.”
The case centered on Anglo Irish loans to clients in 2008 to buy shares in the Dublin-based lender as the family of Sean Quinn, then Ireland’s richest man, sought to dispose of a stake of about 28 percent in the company. A disorderly unwinding of the position would have risked the bank failing, the lender’s one-time chief financial officer testified during the trial.
The jury will continue deliberations today on similar charges against two other former Anglo Irish executives, Willie McAteer and Pat Whelan.
A chartered accountant by training, Fitzpatrick joined a predecessor of Anglo Irish in 1974 and became chief executive officer in 1986. He became group chairman in 2005 and quit the bank in December 2008.
The roots of the case lay in a wager by self-made tycoon Quinn on Anglo Irish shares, using instruments called contracts for difference. During the trial, Quinn said he had first become interested in the derivatives in 2006, building his exposure over the following two years.
As the value of the shares underpinning the derivatives plunged amid the worsening credit squeeze, the Quinns were forced to reduce their exposure.
Anglo lent about 620 million euros ($856 million) to 10 of its wealthiest clients, known as the Maple 10, and members of the Quinn family, to acquire the shares.
While Irish law allows banks to make loans to buy shares in the ordinary course of business, prosecutors said extending credit in this instance fell outside those boundaries.
After Fitzpatrick was cleared of six charges last week, prosecution lawyer Paul O’Higgins said there was no evidence the former banker knew of the loans to the Quinns.
To contact the editors responsible for this story: Heather Harris at firstname.lastname@example.org Dara Doyle, Jim Silver