High time for State to take stock after Davy debacle

World of Politics with Harry McGee

I love the slogan for Davy Stockbrokers which we hear on radio all the time. “It’s not just business. It’s personal.” As events of the past week have shown, it’s not an empty slogan – at least not as far as 16 of its own executives were concerned.

I’m not sure what has been worse, the revelation that Davy was fined more than €4.13 million by the Central Bank for not telling a client it was essentially both the broker and the buyer for a deal; or the fact that, when the Central Bank findings were announced, the firm arrogantly declined to comment publicly on the matter, setting itself up as beyond scrutiny.

It took two days for it to come out and even then, only with platitudes stating it was satisfied that the issues of seven years ago would not be repeated.

The background to this bears repeating: it began with a Northern property developer named Patrick Kearney, who held bonds in the failed Anglo Irish Bank which he wanted to sell.

Davy handled the sale – but they did not inform him that the consortium which acquired the bonds, O’Connell Partners, was comprised of 16 Davy executives.

The deal was done without telling the compliance section of Davy itself of the potential conflict of interest, a clear breach of rules.

Tánaiste Leo Varadkar put it very well when he explained it last week: “It’s as though you were selling your house, the auctioneer pretended to be trying to get the best price for you but was actually the buyer himself.”

For more, read this week’s Connacht Tribune.

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