Economics Correspondent Robert Shortt looks at the controversy surrounding Davy Stockbrokers after it was fined €4.13m for breaching market rules.
What happened today?
Senior Central Bank officials told the Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach, that they intend to discuss the Davy investigation with An Garda Síochána and the Office of the Director of Corporate Enforcement.
The Central Bank's Director General, Financial Conduct, Derville Rowland said they 'absolutely intend to have a proactive discussion’ with other agencies including the Gardai and the ODCE about the content of the Davy investigation.
Ms Rowland also said the Central Bank would not go into detail on questions about the responsibilities of individuals involved in the transaction or on the ownership structure of Davy, only to say it was a 2live supervisory issue."
What’s the latest from Davy?
Its newly appointed interim chief executive, Bernard Byrne, has written to the same Oireachtas committee and said a third party will be appointed "imminently" to conduct a review of the findings of the Central Bank action against the firm.
In the letter, Mr Byrne repeated the board of Davy’s unequivocal apology and regret for what happened, for which it was "truly sorry".
Remind me what happened again?
A group of 16 Davy employees, including some senior executives, had sidestepped the firm’s own compliance section to conduct the transaction in Anglo Irish bonds on their own behalf.
The client had been kept in the dark too. The Central Bank described Davy’s actions as "reckless".
It also found that Davy "provided vague and misleading details and wilfully withheld information" when the Central Bank inquired into the transaction.
What’s happened over the past week?
Quite a lot.
First, Davy was forced to re-issue an internal statement to staff as it had claimed the Central Bank had made "no findings of actual conflict of interest".
The Central Bank pointed out there's no difference in the regulations between an "actual" or "potential" conflict of interest.
A new statement was issued, which dropped the claim there had been no finding of actual conflict of interest. Arguably, Davy had just made a bad situation worse.
The Minister for Finance called on the firm to make a statement, which it eventually did.
Opposition politicians called for the National Treasury Management Agency to cut ties with Davy.
Then on Saturday, the resignations came.
Was that it?
No.
Yesterday, the National Treasury Management Agency removed Davy as one of its primary dealers in Irish government debt auctions.
That’s a big deal.
Primary dealers are firms that sell Government bonds to international investors. Davy was the last Irish-owned dealer among the 15 recognised by the agency. It’s a prestigious and lucrative business.
In a strongly worded statement, the NTMA said it believed "the behaviour described in the Central Bank findings falls substantially short of the standards expected from market counterparties, peers and colleagues in the bond market and is potentially damaging to Ireland’s reputation as a sovereign issuer".
A few hours later, Davy announced it had closed its bond operation.
Four employees had been made redundant and it said it no longer employed any of the 16 involved in the 2014 transaction.
