Central Bank to be grilled over stockbrokers
THE Central Bank will tomorrow be publicly challenged about why further investigations – including a probe by gardaí – have not been initiated into the Davy stockbrokers’ scandal.
Dáil finance committee chairman John McGuinness said the Central Bank, which has fined Davy a record €4m for wrongful trading practices, will be asked to describe in detail what role 16 individual executives played in the irregular sale of bonds.
“We will also be asking why these 16 individuals cannot be named,” Mr McGuinness told the Irish Independent.
The details of the irregular dealing, which came to light last week with the revelations of the Central Bank fine, are complex. But Mr McGuinness said the principles in question – trust and honesty – were extremely simple.
Tánaiste Leo Varadkar told the Sunday Independent that what happened was entirely comparable to an auctioneer undertaking to get the best available price for a seller’s house on the open market. But instead the auctioneer bought the house at not necessarily the best price, and that was in principle what individuals at Davy had done in the 2014 leading to investigation and fines.
Last night a Davy spokesman could not say whether senior
executives at the firm would accept the Dáil finance committee invitation to publicly explain further details. “I cannot reply to that at this time,” the Davy spokesman said.
Davy issued a terse statement saying it was aware of the importance and urgency of the issues being raised. “Davy recognises the seriousness of matters raised by the CBI investigation and the requirement for near terms answers and actions, balanced by the requirement for due process in respect of the range of stakeholders involved,” the statement read.
“Subsequent to the Central Bank of Ireland findings, three of the firm’s most senior figures have resigned and an interim CEO has been appointed. The independent directors are committed to ensuring that their review of the findings is fully informed by independent expert advice by parties not previously involved with the process,” the Davy comment concluded.
On Saturday, Davy chief executive Brian McKiernan, non-executive director and deputy chairman Kyran McLaughlin, and Barry Nangle, head of bonds at the firm, resigned.
This had followed an intense week of scrutiny after Davy’s initial response compounded controversy and led to stronger political demands for answers.
Mr McGuinness said if Davy was trying to re-establish trust with the financial community and the wider public, the firm would avail of this possibility for a full public explanation. But in the meantime, he said the committee members would be asking Central Bank representatives a number of key questions at tomorrow’s hearing.
These included how the matter occurred and how it went undetected for such a long time. There were also questions about the likelihood of other similar cases and the roles and identities of the individuals involved.
The committee chairman will question what role the Office of the Director of Corporate Enforcement would have along with any Garda Síochána investigations.