Former director of lending at Anglo Irish Bank Pat Whelan has been fined €3,000 for failing to maintain a register detailing an €8m loan to another former director of the bank.
Willie McAteer, Anglo's former head of finance, has pleaded guilty to fraudulently obtaining a loan for more than €8m from the bank on 29 September 2008. He will be sentenced next Monday.
Dublin Circuit Criminal Court heard McAteer bought shares in Anglo and had loans of more than €8m from Bank of Ireland secured against these shares.
If the value of the shares fell to a certain point, Bank of Ireland could sell them without notice.
The court was told that on 29 September 2008, McAteer informed the board of Anglo Irish Bank that the shares were now at that point and could be sold by Bank of Ireland.
The court heard that the sale of so many shares by a director of Anglo could have had a catastrophic effect on the bank at the time.
Anglo decided to give McAteer a loan so the Bank of Ireland loans could be repaid.
The court heard McAteer did not seek the loan and did not devise its terms, but did accept it.
The loans from Bank of Ireland were "full recourse" - meaning the bank could pursue McAteer personally for the full value of the loans, regardless of the value of the shares.
The Anglo loan was initially secured only against the shares although the court heard McAteer later allowed the terms to be changed so that Anglo could pursue him personally, except for his family home and his pension.
The court heard banks are required to maintain register of loans to their directors but Whelan pleaded guilty to not doing so in this case.
The court was told Whelan was never asked by gardaÍ why he did not record McAteer's loan in the appropriate way.
The court heard there was some confusion in Anglo about maintaining a register of directors' loans and that it was not done for any of the bank's directors.
Lawyers for Whelan said it would not normally be his role to maintain such a register but the legislation imposes an obligation on all directors aware of such loans to see that it is done.
The maximum penalty for the offence of failing to maintain a register of loans to directors is almost €13,000.
Judge Martin Nolan said he was satisfied Whelan did not know of the burden placed on him and probably did not know the appropriate way to record the transaction.
He fined him €3,000 with three months to pay.
Whelan has a previous conviction for giving unlawful loans to ten developers to buy shares in Anglo.
He was sentenced to 240 hours of community service after that trial.
The court heard he had not come to garda attention before or after these offences had been committed.