The firm said it “deeply regrets the shortcomings that emerged from the Central Bank of Ireland’s investigation and apologises unreservedly and unequivocally that these failures occurred”.

The stockbroker added that it had “…failed to adhere to the high standards expected of the firm both internally and externally”.

The statement, which is similar in content to the memo issued to Davy staff, stated that internal and external reviews have taken place at the broker.

It added that there has been “a process of Board, management and staff renewal over recent years.”

The Board of Davy is “satisfied that the issues that occurred in 2014 could not recur,” the statement said.

It also stated that it has commenced a “detailed review of the findings so as to ensure that lessons are learnt and appropriate actions are taken.”

Earlier today, Taoiseach Micheál Martin told the Dáil that the behaviour at Davy was “unacceptable”.

Taoiseach Micheál Martin

Mr Martin said the fine imposed on the company by the Central Bank would have an “impact on behaviour” and added “we will see what can be done to disincentivise behaviour”.

The chief executive of Davy, Brian McKiernan, issued an updated internal memo to staff today in response to the fine imposed on the firm by the Central Bank yesterday for breaches of market rules on conflicts of interest.

In yesterday’s memo, Brian McKiernan noted there had been “no findings of actual conflict of interest or customer loss, there were significant shortcomings in how the transaction was conducted, particularly in the context of the policies and controls relating to the management of potential conflicts of interest.”

Today’s memo removes the reference to “no findings of actual conflict of interest or customer loss.”

In a statement to RTÉ News yesterday in response to the first Davy internal memo, the Central Bank said: “There is no distinction between an actual conflict of interest and a potential conflict of interest in MiFID (Markets in Financial Instruments Regulations).

“The extent of the obligations on the firm and the severity of breaching those obligations remains the same regardless,” the Central Bank added.

The National Treasury Management Agency has issued a statement in response to yesterday’s fine imposed on Davy by the Central Bank. 

“The NTMA notes the very serious findings by the Central Bank in this matter. The NTNA is monitoring the situation closely and awaits the company’s response to the Central Bank findings,” the statement said.

The Minister for Finance has said he does not know if any of the individuals at the centre of a controversy at Davy stockbrokers were sanctioned because he is not privy to the exact details that underpinned the Central Bank’s investigation.

The Central Bank yesterday fined Davy €4.13m for breaching market rules in relation to a transaction involving the broker’s own staff. 

It was the biggest fine of its kind ever levied on a broker in Ireland. 

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

The transaction in question took place in November 2014.

The Central Bank said a “consortium” of 16 Davy employees, including a group of senior executives, bought what are understood to have been unlisted corporate bonds from a client at an agreed price.

But the client was not made aware that the consortium was made up of Davy employees.

Speaking on RTÉ’s Morning Ireland, Mr Donohoe said the investigation into Davy demonstrated the value of having a strong frame work in place to deal with lapses in behaviour. 

Mr Donohoe said the Central Bank report detailed a level of behaviour at Davy that fell significantly short of expected standards and it would be appropriate for the company to issue a public statement. 

The Minister said the National Treasury Management Agency would decide if the State would continue to send business to Davy stockbrokers and he has no doubt that the NTMA will carefully monitor this situation. 

Meanwhile, Sinn Féin’s Pearse Doherty has said the NTMA, which manages the taxpayers’ money, must now cut its ties with Davy stockbrokers.

He said the apology from the firm today does not go far enough and there is a lack of accountability for what happened.

Labour TD Ged Nash accused the stockbroker of circling the wagons and he said it seemed intent on “brazening this out”.

Minister Donohoe said what happened at Davy was unacceptable and he noted this evening’s statement.

He said the behaviour which has been detailed by the Central Bank falls gravely short of the standards of behaviour that are expected of leaders in a position of financial responsibility.

The Dáil also heard calls on the Minister to ask Bank of Ireland to pause all planned bank closures.

Mr Dohonoe accepted that many people will still need, or want, to carry out their banking activities in person.

He said it was a welcome development that Bank of Ireland is now entering into a new partnership with An Post that will allow personal and business customers to use their local post office for a range of banking services.

Source