TWO members of the so-called Maple 10 were assured financial regulators and a leading law firm had backed multi-million euro loans they were given from Anglo Irish Bank to buy 10 million shares as the lender was on the verge of collapse, a court heard.
Developer Joe O'Reilly told the trial of three former Anglo executives he was holidaying in Faro, Portugal, in July 2008 when the banks then head of lending Pat Whelan and former chief executive David Drum flew out to meet him for a Sunday lunch meeting.
He said Mr Drumm, who is in the US and not on trial, did most of the talking on the day and told him a major shareholder had a significant amount of Anglo shares - 24pc - with 15pc contracts for difference which were causing turbulence to the price of shares and driving the shares down.
He said he agreed to buy 1pc of shares - 10 million for 60m euro - that day and trusted the bank as he was told "that had had legal advice from MOP (Matheson Ormsby Prentice), senior counsel, and Morgan Stanley and that the financial regulator was on board.
He told the jury at the Circuit Criminal Court in Dublin that there was also some inference to another body which he "believed at the time to be the Department of Finance".
He had not been told businessman Sean Quinn was the main shareholder, he added.
Earlier, developer Sean Reilly said he was a long standing customer of Anglo in July 2008 when he was also approached by Mr Whelan.
He met the same pair at Anglo head office on St Stephen's Green the following day, July 9th, where he alleged Mr Drumm told him the bank shares were coming under pressure and they were trying to unwind the position of the bank and asked if he would buy €60m of shares.
Mr Reilly said the offer was very simple.
"They said they had a legal opinion from MOPs and that the Financial Regulator was aware of it, the Central Bank, that everyone was aware of it and wanted it done."
Mr Reilly told the court he signed a letter agreeing to the terms of the loans on July 11, 2008, and a second document granting power of attorney over to Anglo to open an account with Morgan Stanley to purchase up to 12 million Anglo shares in his name.
He said he understood there was 25pc recourse, meaning he would only have to pay 25pc of the loan if the shares tumbled to zero.
He told prosecuting barrister Una Ni Raifeartaigh SC that he went ahead with the deal because he was asked and he thought he couldn't lose and could make some money on it.
"I felt they wanted us to go ahead," he said.
"With 25pc recourse it was a reasonable commercial deal. The shares has lost 75pc and at that stage they would have to lose another 75pc before we would be lose any money ourselves."
He later sold 80pc of his shares and lost 2.5m euro in the deal.
Sean FitzPatrick, 65, from Greystones in Co Wicklow, 51-year-old Patrick Whelan of Malahide in Dublin and 63-year-old William McAteer of Rathgar in Dublin have all pleaded not guilty to 16 charges of unlawfully providing financial assistance to individuals for the purpose of buying shares in Anglo Irish Bank in 2008.
Mr Whelan has also denied seven charges of being privy to the fraudulent alteration of a loan facility letter.