Central Bank investigating Davy over bond sale

The Central Bank is investigating stockbroking firm Davy over the sale of former Anglo Irish Bank bonds by developer Patrick Kearney.

Mr Kearney, one of a number of developers who bought shares in the bank during the financial crisis, sued Davy for advising him to sell the bonds at a price below their true value, but the parties settled in late 2015.

The Sunday Business Post reported that the Central Bank was investigating the transaction following a complaint. The bank, which regulates financial services, Davy or Mr Kearney would not comment yesterday.

Mr Kearney, head of Kilmona group, bought the bonds, which had a face value of €27 million with an €18.4 million loan from Anglo in 2009. Stapleford Finance, part of US fund Carval, bought the debt for €1 million in 2015.

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The developer hired a firm called Le Bruin to work with him on the sale of the bonds. Following talks with Davy, he agreed to sell them, allowing him to pay off the debt to Stapleford. Mr Kearney subsequently claimed that he discovered he could have received a better price.