Global professional services firm Alvarez & Marsal said that as part of a "comprehensive review" of Davy Stockbrokers it did not identify any instances of staff dealing that were similar to the transaction that resulted in a record Central Bank fine in March.

Alvarez & Marsal also said it had found no instances of actions that had resulted in "crystallised harm or detriment" to Davy's clients.

Davy was fined €4.13m by the Central Bank in March for breaching market rules - the biggest fine of its kind ever levied on a broker in Ireland.

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.

Bank of Ireland today agreed to buy most of Davy Stockbrokers for an enterprise value of €440m.

Alvarez & Marsal said today that over the seven year review period, it had identified instances of personal staff dealing in relation to a very small number of high-value deals that displayed signs of potentially higher conflict of interest risk.

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

"However, A&M found that not all of these were subject to adequate (or adequately documented) review at the time," the professional services firm said.

A&M also said it examined instances of staff dealing in certain products which they deemed to carry higher risk of conflicts of interest but were subject to compliance scrutiny at the time.

In these cases, the decision to allow the staff dealing was adequately reasoned relative to Davy's staff dealing rules, and A&M said it did not find any harm or detriment to Davy's clients, it added.

However, in reviewing staff dealing from October 2014 to December 2020, A&M noted the high levels of staff dealing, with the highest aggregate amounts being generated by a small number of individuals within the company.

A&M said it reviewed remedial actions taken in 2015/2016 on the back of third party recommendations after the initiation of the regulatory investigation and further compliance actions taken by the firm.

"The review concluded that all of the recommended actions were undertaken on a timely basis, with improved controls implemented on conflicts of interest, staff dealing and account opening," the professional services firm added.

A&M said it had full discretion to go back further than 2014 if they found reason to do so during the investigation, but said they were satisfied that their work did not highlight any relevant issue that necessitated this.

As part of its review, A&M made recommendations to the Davy board to further strengthen its control environment.

The recommendations include further additions to the stockbrokers' conflicts of interest policy, certain procedural changes and suggestions for specific elements of training.

They also include modification of aspects of the approach to staff dealing that would result in a more prescriptive policy as well as compliance tracking of aggregate trading levels and trading patterns of individual staff members.

It urged the introduction of trigger points which would prompt more intensive review and/or escalation to the Board and guidance on new industry practices that can improve whistleblowing effectiveness.

In a statement, Davy Chairman John Corrigan said today's sale is intended to help restore trust in Davy and represents a key element of its response to the recent regulatory sanction.

"The Davy Board re-affirms its deep regret for the shortcomings identified in the regulatory sanction and, again, apologises unreservedly that these failures occurred," the chairman said.

John Corrigan said the interests of Davy's clients have been at the heart of the sales process.

"We believe that we have found the best owners for all of our stakeholders. Within Bank of Ireland Group, Davy will retain its brand and structure," he stated.

"We believe that this represents an attractive opportunity for Bank of Ireland, the Davy team and its clients who value opportunity, growth and ambition," he said.

"Equally, we believe that IQ-EQ and AssetCo are natural and constructive long-term owners of DGFM and Rize ETF," the Davy chairman said.

"The focus of the Board now is to conclude the sales process and to continue to provide a world-class service as part of an enhanced platform," he added.