Businessman Patrick Kearney has not changed his claims against stockbroker Davy and 16 of its former employees since the day he brought proceedings against them for alleged fraudulent concealment, the High Court has heard.
Mr Kearney said he took the case after the Central Bank last year fined Davy a record €4.1 million for regulatory breaches arising from personal account dealing.
That arose from an investigation report stating Davy prioritised facilitating an opportunity for 16 employees to make a personal financial gain when dealing with a client’s bonds over ensuring that it was complying with its regulatory obligations.
Mr Kearney and his firm Kilmona Holdings claim J&E Davy and the 16 former employees made a profit of €9.3 million from the 2014 onward sale of his Anglo Irish Bank bonds, allegedly involving the fraudulent concealment of information about the employees being the purchasers.
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Davy and the 16 deny the claims.
This week, 15 of the 16 asked the court to strike out Mr Kearney and Kilmona’s claim as bound to fail on the basis of Mr Kearney’s own pleadings.
[ Court hears ex-Davy employees want businessman's claim struck outOpens in new window ]
It was argued that Mr Kearney was aware his bonds were sold to the “O’Connell Partnership” and he was aware it comprised the former Davy 16. This, it was submitted, was because he had brought a different 2015 case against Davy alleging the sale of his bonds at an undervalue and a conflict of interest. That 2015 case was eventually settled.
On Wednesday, Mr Kearney’s senior counsel, Martin Hayden, said his clients had not in any way “abandoned our case”.
He rejected an argument on behalf of the 15 who Mr Kearney knew were involved around the time the bonds were sold.
What Mr Kearney knew, and what he was told at the time, was that the Davy employees were providing finance for the purchase but he was specifically assured there was no connection between Davy and the purchaser, even though this was not the case, counsel said.
Mr Hayden said the 15 personal defendants had mischaracterised Mr Kearney and Kilmona’s claim, which had been consistent in its position in the previous proceedings and in this case.
Fundamental to the case was the distinction between the representation that the Davy employees were lenders of finance for the purchase and knowledge about who the purchasers were, he said.
The O’Connell Partnership was formed specifically for the concealment of what was happening with the bonds, he said. There were no returns from that partnership and it was not known what they received but we did know that the overall profit was €9.3 million, he said.
The 15 former employees’ counsel had claimed that the distinction between the purchasers and the loan givers was “a yarn” but that “if there is yarn-telling here, it is not my client”.
Mr Hayden, who also went through some of last year’s Central Bank report which imposed the €4.1 million fine on Davy, said his client was relying on the contents of that report in making his case.
The 16th partnership member, Tony O’Connor, is reserving his position in relation to the strikeout application pending the hearing of the motion brought by the others, the court has been told.
Mr Justice Michael Twomey reserved his decision.
