Davy Facing Mounting Pressure as Debt Office Awaits Answers

Ireland’s biggest securities firm Davy faced mounting pressure to provide more detail on a scandal which enveloped some of its top executives, as the nation’s debt office pressed for answers from the firm.

The National Treasury Management Agency said Wednesday it’s monitoring the situation at Davy, as “it notes the very serious findings by the central bank.” The regulator on Tuesday accused the firm of a “lack of candour” and said it provided “misleading details” during a probe into a deal involving 16 staff at the broker.

The NTMA “awaits the company’s response,” it said.

The case centers on a deal which saw a consortium of employees, including senior executives, buy bonds from a client in a personal capacity, the central bank said, without the customer knowing they were the buyers. The NTMA’s position adds pressure on Davy, which is a primary dealer in Irish government bonds and routinely advises the Irish government.

The firm was joint bookrunner on a syndicated sale of 5.5 billion euros ($6.6 billion) worth state debt in January and of 6 billion euros in June. It also acted as a global co-ordinator on the government sale of part of its holding in AIB Group Plc in 2017, which raised about 3.4 billion euros.

Davy’s behavior fell significantly short of what is expected, Finance Minister Paschal Donohoe told RTE Radio on Wednesday, urging the firm to make a public statement.

“We deeply regret and are sorry for the shortcomings that gave rise to the findings which could not recur today,” Davy Chief Executive Officer Brian McKiernan said in a note to staff seen by Bloomberg News on Tuesday. It also told staff the firm was “constrained” from commenting further.

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