When Ireland's largest stockbroker was hit with a record €4.1m fine by the Central Bank last March there was, predictably, a commensurately large response.

The revelations of the manner in which the behemoth, with €16bn in assets under its management, had breached regulations by acting for a client selling bonds in 2014 without telling him the buyer was a consortium of 16 Davy executives, sent shock waves through the business and political system.

There was understandable public outrage at the fact that something like this could happen at Davy at all, not least with involvement from some of those at the highest level of the company.

It only went to reinforce and underscore the public perception that despite all the talk of improved ethics and good corporate governance in recent years, sections of Irish business still continue to act with an arrogant and laissez faire attitude.

There was much discussion about the failure of trust in an institution that had held itself up as the best and most trustworthy in the business.

The NTMA pulled Davy's authorisation to act as a dealer of government bonds in the wake of the crisis (Pic - Rollingnews.ie)

The Davy radio ad, "It is not just business, it is personal," suddenly took on a whole new meaning.

The controversy quickly gathered legs, not helped by the actions, or more correctly the inactions of Davy’s senior leadership in the wake of the fine being handed down.

Davy was slow to publicly apologise and so by the time it did, it came too late and fell on deaf ears.

Within days, amid growing anger and unbearable public pressure, a number of senior Davy executives, including CEO Brian McKiernan, who were part of the consortium of 16, or "O’Connell Partnership" as it was known, left the organisation.

As large corporate clients of the company publicly and privately began to ask questions, the National Treasury Management Agency pulled Davy’s authorisation to act as a prestigious dealer in Irish Government bonds.

That then precipitated the closure of the bond desk, with further departures from the company.

At that point Davy’s board declared that nobody else involved in the controversial consortium remained working for it.

Ongoing political pressure

But the blood-letting wasn’t enough, because it remained the case that a large part of the broker continued to be owned by some of those involved in the 2014 bond transaction, even though they had now left.

Brian McKiernan reportedly held 13%, with a group of other former senior executives, including former deputy chairman, Kyran McLaughlin, another former CEO Tony Garry, and former Head of Bonds, Barry Nangle, holding an additional 20% between them.

The optics of them continuing to have a say in the running of the business from afar didn’t sit well or indeed augur well for repairing the shattered image and reputation of the firm.

And so, amid ongoing political pressure, the decision was made by the board and shareholders to put the business on the market.

Over the proceeding four months, the process managed by Rothschild & Co reportedly attracted many potential suitors, both domestic and international, large and small, well-known and less readily recognised outside of the community.

That culminated in the announcement on Thursday that three deals had been agreed.

The biggest of them was that Bank of Ireland, long seen as the frontrunner among the potential buyers, would purchase the most attractive and lucrative parts of the business, the wealth management and capital markets divisions, for €440m.

Bank of Ireland is buying the most lucrative parts of Davy for €440m (Pic - Rollingnews.ie)

Staff may get an additional €40m in performance-related payments from their new owner after 2025, if certain targets are met.

Bank of Ireland will also "buy" €125m in cash that Davy is expected to have on completion.

Most of that money will arise from the two other deals - the sale of Davy Global Fund Management for an undisclosed fee to Luxembourg based IQ-EQ and the sale of Davy’s majority stake in Rize ETF to AssetCo for €19m.

In total then the deals have the potential to yield up to €605m for shareholders (although probably less when debt is taken into account), including the members of the consortium whose actions ultimately led to the sale having to take place in the first place.

Not the end of the controversy

It is a very large amount of money - far more than the roughly €400m that market speculation over recent months suggested might be realised.

Some already very rich people will get even richer from it all.

Not exactly the outcome many members of the public or politicians might have hoped for.

It doesn’t, however, necessarily signal the end of the controversy.

For starters, the former Davy client at the centre of the controversial 2014 bond transaction, Patrick Kearney, has instigated a second round of legal action in the High Court, after he settled the first one he took in 2015 a year later.

This case, when it goes to hearing, will see all the details of the trade poured over once again, this time in public.

We also know from the appearance before an Oireachtas committee in March by Director of Financial Conduct, Derville Rowland, that the Central Bank was treating the situation as a "live supervisory matter".

It is not clear whether that remains the case or not.

Nor is it clear where Ms Rowland’s planned "proactive discussion with a number of agencies" about the case, "including An Garda Síochána and the Office of the Director of Corporate Enforcement," might have led or might yet lead to.

The Central Bank said in March it is treating the situation as a "live supervisory matter"

Although Ms Rowland did also tell the committee at the time that the probe into the stockbroker did not form views that criminal reports should be made to other agencies.

There is also likely to be continued political fallout from the decision by the Minister for Finance to grant Davy permission to keep its variable pay structures, allowing it to avoid falling foul of the Government’s restrictions on bankers pay and bonuses once it enters the Bank of Ireland Group.

For Davy staff that new home arguably represents the best possible outcome for them after a turbulent few months.

The bank will bring calm and stability to the stockbroker, keep the business for the most part together, and although the Davy name will be retained and its existing management will remain in place, it should also help it to quickly rebuild some of the reputational damage.

Bank of Ireland will have had a good poke around in the closets for other lurking skeletons, and is likely to have satisfied itself that no major ones exist.

A separate independent review, commissioned by Davy and carried out by international consultancy Alvarez and Marsal, also didn’t find any major land mines lying around in the form of historic transactions like the 2014 bond deal.

But it did identify instances of staff dealing in relation to a very small number of high-value transactions that displayed signs of "potentially higher conflict of interest risk".

In none of these transactions did they identify any serious concern as to a conflict of interest or client detriment.

However, Alvarez and Marsal did find that not all of these were subject to adequate, or adequately documented review at the time.

As something of a warranty, Bank of Ireland will be holding onto 25% of the agreed price until 2024, just in case anything else unexpected emerges.

And given what’s happened in the last six months, who’d blame them?