High court approves final payment to clients of W&R Morrogh

Cork stockbroking firm collapsed more than 10 years ago with losses of €13m

Thu, Feb 20, 2014, 01:05

The High Court has approved an additional and final payment to the clients of a stockbroking firm which collapsed with losses of some €13 million more than 10 years ago.

The receiver of W&R Morrogh will get total fees of some €5.78 million, including legal fees incurred, arising from the 13-year receivership.

Funds embezzled
Cork-based W&R Morrogh, which began operating in the 1880s, ceased trading in April 2001 after it was discovered a junior partner in the firm, Stephen Pearson, had embezzled some €5.5 million of clients funds to play the stockmarket.

Pearson, North Esk, Glanmire, Cork, was later jailed for five years after pleading guilty to 31 charges of fraudulently converting clients’ funds, 11 charges of forgery and five counts of obtaining funds under false pretences between November 1995 and April 2001.

The collapse resulted in the firm’s closure by the Central Bank and losses of some €13 million to more than 2,500 clients.

Yesterday, Mr Justice Paul Gilligan granted a number of orders, including one providing that creditors of the firm will receive a second and final dividend of 13 cent for every euro they lost.

Total dividend
That payment brings the total dividend paid to creditors out of the receivership to 43 cent per euro but an additional sum of €7.7 million paid by the Investor Compensation Company Limited (ICCL) to Morrogh clients brings the total figure to 60 cent per euro.

The orders were sought by the receiver, Tom Grace of PricewaterhouseCooper, who was appointed in 2001.

Mr Justice Gilligan also approved fees and expenses incurred by the receiver which, the judge said, were “reasonable”.