Stockbroker Davy to be sold in wake of scandal
A stockbroker with significant interests in Northern Ireland and fined €4.1m by the Central Bank of Ireland for breaches of financial market rules is to be sold.
Earlier this week, the Republic’s National Treasury Management Agency (NTMA) withdrew stockbroker Davy’s authority to act as primary dealer in Irish Government debt. The NTMA described the firm’s behaviour as falling substantially short of the standards expected.
Davy has been embroiled in controversy after three of its senior figures resigned over the weekend.
The fine was the biggest fine of its kind for on a broker in the Republic. It was handed down for a breach of market rules in relation to a transaction involving the broker’s own staff.
In a statement, the company said: “The Board of J&E Davy has decided to pursue a sale of the group. Rothschild & Co has been appointed as financial adviser to manage the process.”
Davy employs approximately 70 people in its Belfast office, and manages an estimated £1.8bn worth of assets owned by individuals and organisations here.
That includes a contract to manage nearly £200m in court funds for Stormont’s Department of Justice.
The company reported in December average annual return over five years of £7.7m, or 3.9%, on the court funds.
From opening its office in 2007, it has grown into a Northern Ireland wealth management giant, built in large part on an aggressive acquisition strategy, including the take over of Danske Bank clients, Pension Financial Consultants, and Graham Corry Cheevers.
On Wednesday, the Taoiseach said the scandal was “unacceptable” and revealed an “appalling level of greed” that has damaged the financial services sector.
Micheal Martin criticised executives at the firm for frustrating efforts by the Central Bank and the financial regulator to uncover the truth of the matter.
Mr Martin said: “The behaviour by the Davy executives was absolutely unacceptable. I think it reveals an appalling culture of greed and has damaged the reputation of the financial services sector in this country.
“Executives in business, or in the financial services, should never put personal gain above their duties and responsibilities.”