Anglo Irish FD gets community service

Two former directors of the bank that nearly bankrupted Ireland, Anglo Irish, have been sentenced to 240 hours community service for an illegal loan scheme.

Chartered accountant and former finance director of the bank William McAteer and former head of Irish lending Pat Whelan received the sentence at Dublin’s Circuit Criminal Court in lieu of a two-year jail sentence.

The pair had breached the Irish Companies Act 1963 by making illegal bank loans to 10 investors, known as the Maple 10 in July 2008. They did so as they had feared the bank’s share price was about to collapse due to an earlier high-risk transaction involving Sean Quinn, once Ireland’s richest man who owned millions of shares in the bank. He had built up a large stake in the bank by gambling on its share price.

According to state broadcaster RTÉ, this was the first prosecution under section 60 of the act. 

The pair have been given a year to complete the community service. The judge didn’t specify what they were to do but potential activities include gardening, graffiti removal, recycling projects and painting and decorating community centres.

McAteer and Whelan were found guilty earlier this year of illegally lending to the investors to prop up the bank’s share price, reported the BBC

The judge said the country’s financial regulator was at fault for not stopping the share price deal. He said it had led the directors into “error and illegality”.

McAteer, from Donegal but now living in Dublin, qualified as a chartered accountant in the 1970s, according to the Irish TimesHe was a partner at PwC, going on to become managing director of venture capital lending firm Yeoman International Leasing. In 1992 he joined Anglo Irish Bank and remained finance director for 15 years.

In February, emergency legislation was passed by the Irish government to liquidate the bank. When it collapsed in 2008, it was the first bank to seek a government bailout. 

The rescue of this and other Irish banks led to the IMF and EU having to bail the Irish government out in 2010 to the value of €85bn (£67m).

Comments
Glennzy's picture

Tough Sentence    2 thanks

Glennzy | | Permalink

That will really make them think about doing it again.

When are some of these people going to jail for what they have done to both individuals and businesses.

Deterrent?

RussellG | | Permalink

A penalty of four working week's of menial work?  Might be a bit embarrassing, but hardly a penalty.  Would suggest if going to do Community Service as a punishment, 2400 hours would seem a bit more realistic.

Fair sentence really

Brend201 | | Permalink

Whatever about the actions of bank directors in other matters, a close scrutiny of the court proceedings would lead one to conclude that the sentences in these cases were actually a fair outcome.  It is not clear from the summary above that the defendants effectively obtained permission from the then Financial Regulator to implement the actions for which they were convicted.  The judge was quite scathing about the Regulator and implied that he too had a case to answer!  Here are extracts from a court report on the case:

"The judge said the attitude and behaviour of the Financial Regulator had complicated the issue of sentencing.  He said it would be unjust to imprison the two men when a State agency had led them into error and illegality. The judge said Patrick Neary the Chief Executive of the Financial Services Regulatory Authority, seemed to have limited recall and seemed to have difficulty recalling vital events. The judge said it was "incredible" that the Financial Regulator did not take advice from colleagues in other State agencies about the legality of this.   Saying that it would be incredibly unjust for the court to impose custodial sentences in these circumstances, he added that explicit warnings should have been given by State agencies and the solicitors involved and they were not given. "  Having said all that, I still hope that culprits will be brought to account for bankrupting the country.  

 

 

Brend201    1 thanks

RussellG | | Permalink

I admit I didn't know any of what you've reported - with that in mind I think I'd agree with you

Anglo Irish Bank

Shay Daly | | Permalink

Brend 201 questions whether the Regulator approved the transaction.The answer is NO.However,he was aware of what the bank proposed doing and did nothing to indicate his approval.In the wellknown speak of public servants,this is in reality approval.
Another point to bear in mind is that the Judge in his past was a Police officer.
His essential finding was that a crime had been committed therefore the perpetrators were guilty.In his view,the approval or otherwise of the Regilator was only to be taken into account when sentencing was the issue.Frighteningly,these guys had legal advice that the transaction was legitimate.That advice was from a top firm.The judge acknowledged this but again pointed out that this was relevant only when it came to sentencing.
I believe the guys were very harshly dealt with.Conviction has many adverse consequences for them personally.