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Davy appoints consultancy firm to review staff trading in wake of bond controversy

Davy said the review will be a “forensic assessment” of staff trading over the past seven years.

DAVY HAS APPOINTED consultancy firm Alvarez & Marsal to carry out an internal review of its operations in the wake of the bond deal controversy that has rocked the company.

The stockbroker said in a statement this evening that the professional services firm will engage in a “forensic assessment” of staff trading over the past seven years and any other relevant activity.

It comes after the recent record fine handed down to Davy by the Central Bank over a number of regulatory breaches in 2014.

The investigation will be led by Paul Sharma, managing director with Alvarez & Marsal Financial Services in London and head of the regulatory practice, and it will be carried out by a London based team.

Davy said in a statement that Alvarez & Marsal has had no known prior connection with the firm.

“The review will include a forensic assessment, the scope of which will be determined by Alvarez & Marsal, of relevant staff trading from 2014 to 2021 and of any other relevant activity,” Davy said.

It will also assess the adequacy of enhanced compliance, controls and governance designed to prevent conflicts of interest.

The statement added that Davy’s board is committed to sharing the findings of the probe. The timeframe for the completion of the review has yet to be revealed.

Two weeks ago, the Central Bank levied a fine of €4.1 million against Davy after an investigation found four breaches of market rules by the company between 2014 and 2016 in relation to a bond transaction. 

The scandal has led to the resignation of three senior figures in Davy, as well as the closure of the firm’s bond desk after the National Treasury Management Agency withdrew its authority to act as a primary dealer in Irish Government bonds. 

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