Davy board to search for other potential cases of wrongdoing

The board of Davy is expected to examine whether other cases of wrongdoing occurred at the brokerage as it starts a review of Central Bank findings that it had breached market rules on conflicts of interest.

Davy also promised that it would take "appropriate action" at the end of the review, as major clients, including the National Treasury Management Agency and some of the largest companies on the Dublin stock market, monitor how the firm is handling the fallout from a €4.1 million fine and severe reprimand from the regulator.

The penalty was levied on the stockbroker in relation to a bond deal where a group of 16 staff sought to make a profit without telling the client for whom it was acting or the firm’s compliance team.

The Central Bank found that Davy breached EU rules by failing to take all reasonable steps to see whether a conflict of interest arose in relation to the trade.

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Asked by The Irish Times whether there have been other instances where Davy staff were on the other side to a trade without the knowledge of clients or compliance officials, a spokesman said: “There are no other known occurrences, but this is likely something the board would consider in the review now under way.”

The review will be led by Davy's four independent non-executive directors, led by chairman John Corrigan.

The Irish Times reported on Wednesday that the 16 staff members involved in the 2014 bond deal included Davy chief executive Brian McKiernan, deputy chairman Kyran McLoughlin, head of bonds Barry Nangle, former chief executive Tony Garry and one-time head of institutional equities David Smith.

Mr McLoughlin, Mr Garry and Mr Smith declined to comment. Mr McKiernan and Mr Nangle did not respond to efforts to secure comment.