Davy Affair to Be Discussed With Police, Regulator Says

Ireland’s central bank will discuss the scandal roiling the nation’s leading securities firm Davy with police and other enforcement agencies, a top official said.

“I absolutely intend to have proactive discussions with a number of agencies about this,” Derville Rowland, the central bank’s financial-conduct director general, told lawmakers in Dublin on Tuesday.

She said the regulator could “sit” with police and corporate enforcement officials “in the full facts of the information so that from their perspective, they can consider this matter.”

During its investigation of the controversial bond deal which has rocked the firm, the regulator didn’t see a need for a “criminal” referral, Rowland said. The central bank’s comments came as the scandal surrounding the securities firm continues to reverberate. Davy closed its bond desk on Monday, laying off four staff in a bid to draw a line under the affair.

Last week, regulators concluded that the firm displayed a “lack of candor” and provided “misleading details” during an investigation. The case involved a consortium of employees buying bonds from a client in a personal capacity, without the customer knowing they were the buyers. Davy was fined 4.13 million euros ($4.9 million).

Lawmakers demanded more action.

“There was no indication that individuals were being pursued,” said Neale Richmond of Fine Gael, part of Ireland’s governing coalition. “This sent the wrong message out to the public, to the financial services sector both here and around the world.”

The issue is still a “live supervisory matter,” Rowland said.

The regulator had faced a “challenging” approach from Davy during its investigation, she said.

A spokesman for the firm couldn’t immediately comment.

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