Taylor scandal rocks brokers' confidence

IT may have been a year of boom. But it was also one when the headlines were dominated by controversy. The most infamous case was that of the Dublin investment broker, Tony Taylor, who left his Ballsbridge office one Friday evening in August and has not been seen in Ireland since.

Staff said he had been acting perfectly normally but it later emerged that he had agreed to meet with officials from the Department of Enterprise and Employment the following Monday, to discuss complaints which had been made about him to the Irish Brokers' Association.

Unknown to the officials or the staff in Taylor's offices, the broker had sold his top of the range Mercedes and had arranged with his wife, Shirley, that they would leave the country. A member of staff was asked to mind the couple's dog, Harvey, for the weekend.

The details of the scandal eventually emerged. Money which was being personally handled by Taylor had gone missing. Among those who lost out was the Society of St Vincent de Paul, which had invested over £200,000. Stories emerged of investors who had placed five and six figure sums with Taylor, in some cases the savings accumulated over a lifetime's work.

Questions also arose about tax evasion and the regulation of the investment intermediaries sector.

The original complaints, two in number, against Taylor had been made to the IBA which has a role in regulating investment intermediaries. However, the IBA did not inform the Department of Enterprise and Employment about the cases; the Department was alerted by a British regulatory body.

Even when news of the scandal did break, investors were reluctant to come forward. In one case the Department was asked if the provisions of the last tax amnesty could be made available, in return for clients going "on the record".

A provision of the Investment Intermediaries Act, 1995, was used for the first time, and an authorised officer was appointed to examine the Taylor Group of companies. The group was eventually put into the hands of liquidator Paddy McSwiney, of BDO Simpson Xavier. About £2.5 million of investors' money is believed to be missing.

In December the Taylor home, Somerset, on Anglesea Road, Dublin, was auctioned on behalf of the National Irish Bank, which was owed around £120,000. The house was sold for the unexpectedly high price of £580,000 and the balance left from the sale has been lodged with the High Court.

A decision by the Department of Enterprise and Employment on changes to how investment intermediaries are to be regulated, is awaited.

Earlier in the year another investment adviser was the subject of a provision of the law which was being used for the first time.

In May, Mark Synnott, who had a brokerage on Serpentine Avenue, Ballsbridge, was jailed for four years. He was found guilty under the Companies Act of carrying on business "with intent to defraud the creditors".

The fraud had been carried out against 109 investors, who lost £2.3 million between them. The brokerage had collapsed in 1991. Just a few months earlier Synnott had bought a stud farm in Kill Co Kildare.

The cases of Taylor and Synnott again brought to the fore the whole issue of the regulation of the investment industry. The Minister responsible for Commerce, Mr Pat Rabbitte is now examining the issue of regulation in the industry. The IBA has said it does not want to regulate investment brokers any more and the Minister is now expected to come up with new proposals. But the Government and the industry have a long way to go to rebuild investor confidence in the broking profession.