Central Bank disqualifies former Bloxham partner

Sanction, arising out of Bloxham’s collapse in 2012, is longest ever imposed by regulator

Tadhg Gunnell, the former head of finance and compliance at liquidated stockbroking firm Bloxham, was adjudicated bankrupt by the High Court earlier this year.

Tadhg Gunnell, the former head of finance and compliance at liquidated stockbroking firm Bloxham, was adjudicated bankrupt by the High Court earlier this year.

 

Tadhg Gunnell, the former head of finance and compliance at liquidated stockbroking firm Bloxham, has been disqualified from managing a financial firm for 10 years and fined €105,000 by the Central Bank.

The disqualification order, arising out of his role in the collapse of the brokerage in 2012, is the longest ever imposed on an individual by the State’s financial regulator.

It comes three years after Bloxham - then the State’s oldest stock-brokering house - was liquidated following the discovery of financial irregularities.

Central to its demise was a €5.3 million hole in its accounts, which had been covered up from as far back as 2007.

This meant the brokerage had effectively been trading without the required regulatory reserve.

In a statement, the Central Bank said the penalities imposed on Mr Gunnell related to the misrepresentation of Bloxham’s “true regulatory capital position” between 2007 and 2012.

“Mr Gunnell oversaw certain financial irregularities in the firm’s accounts that contributed to its overstated regulatory capital position,” the bank said.

The Central Bank also said Mr Gunnell had failed in his responsibility to ensure that adequate systems and controls relating to the calculation and reporting of the firm’s regulatory capital were in place.

It said Mr Gunnell has admitted his actions as part of an agreed settlement with the Central Bank.

The €105,000 financial penalty imposed on Mr Gunnell is the second highest fine imposed on an individual by the Central Bank, eclipsed only by the €200,000 fine handed out to Sean Quinn in 2008 for breaches of the Insurance Act relating to third-party loans at Quinn Insurance.

The Central Bank has, however, waived Mr Gunnell’s financial penalty on account of him being adjudicated bankrupt by the High Court earlier this year.

In a statement, a spokesman for Mr Gunnell said: “During this process Mr Gunnell has been open with the Central Bank and co-operated with them fully during the course of their investigation.”

“Mr Gunnell now hopes that this investigation will assist the Central Bank in continuing their investigations into Bloxham Stockbrokers and those who were also responsible for the management of the company alongside Mr Gunnell,” he added.

The financial discrepancies at Bloxham were not picked up by its auditor Deloitte, which signed off on several sets of annual accounts in the period leading up to the firm’s collapse.

Mr Gunnell had joined Bloxham from Deloitte in 2000, where he had been a manager in audit and assurance.

The discrepancies also escaped the Central Bank, which would have perused quarterly financial and capital returns as well as annual financial statements.

Three years after initiating its own investigation, the Central Bank said its probe is still ongoing, but the investigation against Mr Gunnell has now closed. It remains to be seen if the bank will impose sanctions on the other Bloxham partners, most of whom work for other Dublin brokerages.

The Central Bank’s director of enforcement, Derville Rowland said: “The sanctions imposed on Mr Gunnell reflect the seriousness of his actions. Mr Gunnell cannot act as a person concerned in the management of a regulated financial service provider for 10 years.

“The investigation into Mr Gunnell’s role has been complex and detailed in nature due to the manner in which the firm’s regulatory capital position was misrepresented to the Central Bank.”

The Central Bank’s director of markets, Gareth Murphy, said: “ Today’s settlement sends out a clear signal that the Central Bank will use the full range of our powers to ensure consumer and investor confidence.”