Davy asks staff to identify past advice where clients may have had a reason to complain

Interim chief executive urges staff to ‘reflect’ and come forward

Embattled stockbroking firm Davy has asked its staff to come forward if they know of other situations in the past where clients may have had reason to complain about its advice as it tries to negotiate the devastating fallout from its €4.1 million fine over senior executives secretly being on both sides of a bond deal.

Bernard Byrne, who took over as interim chief executive last week after the departure of his predecessor Brian McKiernan in the fallout, on Saturday evening wrote to the firm’s staff asking for their help in identifying “anything that has happened in the past”.

He suggested the firm would this week begin to strengthen its systems for handling complaints, and he asked staff to “reflect” on past situations and come forward with specific instances where there may be an issue to be examined.

“Discuss it with your manager and the complaints team and please do let us know of anything that has happened in the past that we should look at differently. We have an important duty to our clients to be fair, and we have one chance to reset the agenda,” he said.

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In his missive Mr Byrne promised to beef up Davy’s complaints department and put new processes and resources in place. He stressed that losses for clients can happen with investments but it would seek to make sure its policies in such situations are “fair, sensible and client-centred”.

“From Monday I want us to adopt a more positive and engaging tone on all of these issues where possible. The position that Davy has taken on many historic issues will often be absolutely correct, but we should be open to thinking about things differently.”

Mr Byrne said he had been asked “tough” questions by many of its large corporate clients in discussions he had with them last week. He said he wanted clients to “understand the level of our regret at what has happened…We will begin to get past this phase when our actions have earned back the trust we rely on.”

Turmoil

Davy has been in turmoil since the Central Bank announced its fine earlier this month. It related to a case where 16 Davy staff, including Mr McKiernan and its former deputy chairman Kyran McLaughlin, secretly bought at a knockdown price an Anglo Irish Bank bond that the firm was retained to sell for Northern Ireland property developer Patrick Kearney.

He was not told by Davy that it had sold the bond on his behalf to its own senior staff, who wanted to make a profit.

In the wake of the scandal several large Irish-listed companies have begun to review their use of Davy as a corporate broker.

Former chief executive Tony Garry, who was one of the Davy 16, also stepped down from the board of the Mater hospital in recent days. None of the 16 who were involved in the deal are involved with the firm any longer, it says.

Mark Paul

Mark Paul

Mark Paul is Business Affairs Correspondent of The Irish Times. He also writes the Caveat column