Central Bank could hit Davy group of 16 with personal sanctions

Central Bank Could Hit Davy Group Of 16 With Personal Sanctions
The bank, which regulates the sector, can turn its attention to the behaviour of individuals only after it has first found against the company under current Irish law. Photo: Collins
Share this article

Digital Desk Staff

Members of the Davy group of 16 at the heart of the scandal that has landed the stockbroker with a record fine face the possibility of personal sanction from the Central Bank.

As The Irish Times reports, the bank which regulates the sector, can turn its attention to the behaviour of individuals only after it has first found against the company under current Irish law.


The recent decision to fine the business €4.1 million over a rogue bond trade means it can now focus on the behaviour of individuals involved, including senior executives, Minister for Public Enterprise and Reform Michael McGrath said.

The regulator has a range of sanctions available, including fines and barring people from working in a regulated firm.

The company is also under pressure to address concerns over its shareholder structure, as the group of 16 individuals involved in the 2014 trade at the centre of the scandal are estimated to own at least a third of a business that is valued at about €400 million.

Rebuilding trust

Davy’s new interim chief executive, Bernard Byrne, faces a battle to convince clients and staff that the State’s biggest stockbroker can rebuild trust after the Central Bank finding that has triggered the biggest crisis in the firm’s 95-year history and senior resignations over the weekend.


The regulator revealed last Tuesday it had fined Davy €4.1 million and reprimanded the firm after finding that 16 staff, including top executives, had sought to make a profit by taking the other side of a bond deal involving a client in 2014 – without telling him or the firm’s compliance team.

Davy said on Saturday that chief executive Brian McKiernan, deputy chairman Kyran McLaughlin and head of bonds Barry Nangle had resigned with immediate effect.

The executives had been named in The Irish Times as members of the so-called O’Connell Partnership alongside former chief executive Tony Garry and one-time head of institutional equities David Smith.

The board of the company – led by chairman John Corrigan, who joined the firm after the deal – committed on Sunday to proceeding with an independent review of the regulator’s findings.


Meanwhile, John McGuinness, the Fianna Fáil chair of the Oireachtas finance committee, said the Davy controversy goes beyond the 2014 transaction and reopens the focus on its involvement in boom-and-bust-deal-making, including in the Dublin Docklands.

He said that any investigation will go beyond the remit of his committee and other agencies will need to get involved.

Mr McGuinness also said the NTMA will have to cut its relationship with Davy, while the group of 16 will have to explain “what happened and whether it ever happened before”.

Read More

Message submitting... Thank you for waiting.

Want us to email you top stories each lunch time?

Download our Apps
© BreakingNews.ie 2024, developed by Square1 and powered by PublisherPlus.com