Financial irregularities found at Bloxham stockbrokersTuesday 29 May 2012 00.02
Bloxham Stockbrokers has agreed to transfer all its private client and fund management business to Davy's after financial irregularities were uncovered at the firm.
The firm said it no longer has sufficient capital to meet the requirements of the Central Bank to carry on trade as a stockbroker.
The company had informed the Central Bank of financial irregularities at the firm on Thursday evening.
The Central Bank then directed Bloxham to cease all regulated activities, with immediate effect, on Friday evening.
A Central Bank statement said that all former private clients of Bloxham are now clients of Davy, with the exception of a less than 1% who have decided to make other arrangements.
The Central Bank said it will continue its own investigation into the financial irregularities at Bloxham.
A statement from Bloxham, the country's oldest stockbroking firm, said that no client funds are involved or at risk from the discovery of issues in the internal finances of the firm.
The statement said the issues were discovered for the first time late last week after an inquiry from the Central Bank. They related to the reporting and accounting of the firm's income which was overstated over a number of years.
The firm has asked a firm of forensic accountants to verify the position and assist in further investigations.
''A further investigation is ongoing and will be reported as appropriate in due course, having regard to necessary legal and regulatory frameworks and protocols,'' the statement added.
Davy had already agreed to take over Bloxham's private client business in March. The business had assets which totalled €540m and was run from the company's offices in Dublin, Cork and Limerick. Today's events mean that deal has been accelerated.
Bloxham Stockbrokers currently employs 70 staff.
A spokesman for Davy Stockbrokers says that 21 staff will transfer to Davys from Bloxham. All 13 staff from the Asset Management unit of Bloxham will transfer to Davy with continuing roles at the firm.
Of the 27 staff in Bloxham's private client business, ten have already left the firm. The remaining 17 will transfer to Davy, but of this number only eight are expected to continue with Davy.
Bloxham had a private clients business with €540m in private client accounts which belongs to 17,000 customers. These funds are secure and will transfer to Davy. There are eight partners in the company.
The Irish Stock Exchange has also today confirmed that Bloxham is suspended as a member firm of the Exchange in accordance with its rules.
All former private clients of Bloxham, who are now clients of Davy, should contact 01-6119200 should they have any queries.