Record €4.1m fine for Davy over bond trade for Belfast developer

Davy's offices on Dublin's Dawson Street.
Davy's offices on Dublin's Dawson Street.

IRELAND’S largest stockbroker Davy has been fined €4.1 million (£3.5m) by the Central Bank of Ireland over its management of a Belfast client.

The record breaking fine relates to a bond deal involving a group of 16 staff, who sought to make a profit without telling the client or the stockbroker’s own compliance officers.

According to the Irish Times, the case relates to handling of the sale in 2014 of subordinated bonds in the then-defunct Anglo Irish Bank by Belfast property developer Patrick Kearney, which was the subject of a High Court action that was settled in 2016.

It’s understood that Mr Kearney was unaware that the buyer of the bonds was, what the Central Bank labelled, “a consortium” of 16 Davy staff, including a group of senior executives.

The Central Bank said its investigation into Davy identified "serious issues" which required "the imposition of a significant financial penalty".

The Central Bank said that in permitting the transaction to go ahead, Davy had acted "in a reckless manner".

The Central Bank added that "an aggravating factor" in the case was the "vague and misleading details" the stockbrokers provided when it contacted Davy.