Davy rejects charge of improper conduct

Davy Stockbrokers has said it was not involved in any impropriety concerning price-sensitive information on Tullow Oil, writes Colm Keena.

An allegation to that effect was made during a Central London Employment Tribunal hearing on Thursday, where a former analyst with AIG, Mr Fadil Dookhy, said Davy passed "inside information" to his fund manager boss.

A spokesman for the Irish stockbroking firm said it had complied fully with all the relevant rules and regulations in relation to the matter raised by Mr Dookhy. "The allegations are entirely without merit and are refuted," he said.

Mr Dookhy, who accused his former employers of racism, said that, in early March 2003, Mr Patrick Dempsey, a senior broker at Davy, told Ms Chantal Brennan of AIG that Tullow Oil was planning a share placement the following week. Mr Dookhy said Ms Brennan told him and other staff. The stock was put on a restricted basis, barring trading until the information was made public. He said the "breach" was not reported.

However, the spokesman for Davy said it was normal procedure for brokers to inform others in advance of certain pending developments so those persons could be prepared for advising clients. The informed persons are then classed as having "insider information" and are obliged not to trade using this information. That is what happened in AIG in relation to Tullow, he said.

He said AIG's small-cap team was a client of Davy Stockbrokers and Mr Dempsey managed the relationship with that team. Mr Dempsey was due to give evidence to the ongoing hearing next Wednesday but the two sides to the case settled last night.

The tribunal heard that Davy is one of the highest commission earners from AIG London.

Mr Dookhy, a Muslim, joined the AIG small-cap team in 2002. He said he began to encounter problems at work with Ms Brennan when he asked if he could take later lunch breaks on Friday in order to attend the Mosque.

Matters deteriorated sharply after Mr Doohky returned from a fund managers' trip to Dublin, organised by Davy, with a variety of allegations and counter-allegations about inappropriate behaviour being made. Mr Doohky was eventually dismissed and took a case claiming the company was "institutionally racist".

AIG told the tribunal it would vigorously defend itself against the allegations.

AIG is the world's largest insurer by market capitalisation. Its London-based European arm claims to count half of the UK's top 1,000 companies as its clients.