THE BOARD OF Davy Stockbrokers has decided to sell the group following a controversial €4.1 million fine from the Central Bank.
A statement this evening reads: “The Board of J&E Davy has decided to pursue a sale of the Group. Rothschild & Co has been appointed as financial adviser to manage the process.”
On 2 March, it emerged the Central Bank fined the brokers in relation to four breaches of market rules by the firm between 2014 and 2016.
It’s understood to be the largest fine a brokerage in Ireland has ever faced.
The Central Bank said the issue at Davy related to a transaction involving the sale of bank bonds on behalf of “a client” of the brokerage
Last Saturday, Davy announced that its chief executive Brian McKiernan had resigned. It also emerged that its board also accepted the resignations of Davy’s deputy chairman Kyran McLaughlin and Barry Nangle from his executive role as Head of Bonds.
On Monday, the National Treasury Management Agency (NTMA) withdrew Davy’s authority to act as the primary dealer in Irish government bonds with immediate effect.
The NTMA said that Davy’s position as a dealer of government bonds was “potentially damaging” to Ireland’s reputation amid a growing scandal.
The NTMA’s move was described by Finance Minister Paschal Donohoe as “appropriate”.
In a statement this evening, Donohoe said he is supportive of the announcement issued by the board that it has decided to pursue a sale of the group.
Speaking this evening, Minister Donohoe said: “Davy is an important financial services firm employing approximately 700 people with a diverse range of institutional, retail, charity, credit union and corporate clients.”
“It is important to have a stable, well managed, local stockbroking community to support indigenous companies. For this reason, I am supportive of this evening’s announcement.”
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