IBA rejects criticism of role in the `Tony Taylor' debacle
THE Irish Brokers Association "hugely regrets" and is "embarrassed" by the Tony Taylor debacle, but is satisfied that it did as much as it could have in the circumstances to protect investors, according to its chief executive, Mr Paul Carty.
Addressing the Dail Committee on Enterprise and Economic Strategy yesterday, Mr Carty strongly rejected suggestions that the IBA had failed in its regulatory role, stressing that it had fulfilled its duties to the letter of the law.
Mr Carty said if the legislation covering the regulation of investment intermediaries had been given sufficient time to work, he believed it would have eventually "tripped" Mr Taylor.
The IBA council and its members were "horrified" by the collapse of the Taylor group. "No one was more appalled than the IBA, which he has let down so badly" Mr Carty said.
When asked why the association delayed in acting on a tip-off about irregularities at the Taylor group, Mr Carty said the nature of the allegations had been unclear.
He said a former director of the Taylor group had contacted the IBA in May but was unable to identify what exactly was the nature of the problem at the firm
"We had no alternative but to ask him to get more tangible information and for his clients to come forward to make a formal complaint which we could act on," Mr Carty said.
"We cannot act on a nod and a wink," he told the committee. The "IBA did not receive any information it could act on until July, he said.
"The IBA felt it did not have the power to march in and say it had allegations it was not certain about. We wouldn't go in on that basis."
Mr Carty said he was not surprised that the British authorities had been the first to alert the Department of Enterprise and Employment that some investors funds may be missing, because they would have been able to confirm that they had not received those funds.
Mr Carty also confirmed that Mr Taylor was a former resident of the IBA and would have had some input into the association's initial decision to take on the role of regulator to the sector. He accepted one committee member suggestions that this could leave it open to allegations that there was a very "cosy relationship" between the IBA and Mr Taylor but insisted that this would never have deterred it from investigating irregularities. "It never did or never would have," he said.
Mr Taylor, he added, would have had more of an interest in the regulation of investment intermediaries than most other members of the IBA, but again stressed that his views would not have greatly influenced the IBA's decision to police the act.
Asked why the IBA had been keen to relinquish its regulatory role in the aftermath of the Taylor. collapse, Mr Carty said it felt it no, longer had the confidence of consumers on its side or the resources to undertake that role.
"Tony Taylor has changed the whole regulatory requirements under the act and the degree to which we will have to supervise intermediaries who act in this area. We want to see effective regulation," he said.
Mr Carty warned, however, that consumers must be expected to exercise caution in their dealings with intermediaries. They should always make sure that their money is invested where it is supposed to be and payments should be made, directly to that institution.