Revelations will shock Cork's financial circles

W&R Morrogh is one of the smallest stockbroking firms in the Republic. But last night's revelations that the firm has been ordered by the Central Bank to cease trading will send shock waves through Cork's small but very closely-knit financial community.

Market sources last night were not certain whether Morrogh is the oldest or second-oldest broking firm, but they were agreed that Morrogh - founded in 1887 - is one of Cork's most venerable financial institutions with the fourth generation of Morroghs managing the firm.

Sources said that though small - it employs just 12 people - Morrogh has a loyal client base drawn in the main from the "old money" of Cork city and its environs. An indication of the wealth of Morrogh's clientele is demonstrated by the fact that a minimum of £50,000 (€63,487) was required for Morrogh to manage a portfolio for any of its clients.

The expected collapse of Morrogh will mean that the city no longer has a locally-owned stockbroking company, although Goodbody and Davy - the stockbroking subsidiaries of AIB and Bank of Ireland - are both active in the city through their parent banks.

Until 10 years ago, Cork had in fact two stockbroking firms, but Morrogh ended up as the sole local broker after Beale Sheffield - located directly across the South Mall - was shut down by the stock exchange after it emerged that more than £700,000 of clients' money had gone missing.

The "hammering of Beale Sheffield" was a major blow to Cork's financial community. Morrogh's senior partner is Mr Alec Morrogh - he is thought to be the fourth generation of his family to be involved in the stockbroking firm and is seen in local circles as the epitome of the gentleman stockbroker. Mr Morrogh is a man whose probity and honesty has never been in doubt.

But he now faces possible financial difficulties if he is forced to liquidate some assets to meet his unlimited liabilities to the financial shortfall at the stockbroking firm caused by the alleged activities of his junior partner, Mr Stephen Pearson.

The revelation of financial irregularities at W&R Morrogh comes a few weeks after former Dublin stockbroker Mr David McKenna received a suspended prison sentence for offences for forgery when he was a senior partner with broker O'Brien Stokes. Mr McKenna's activities at O'Brien Stokes left an estimated £300,000 deficit which had to be made up by the firm's other three partners.