Opposition TDs accuse Davy stockbrokers of corruption and ‘white-collar crime’

Pressure on NTMA to cut ties with firm over failure to hold individuals accountable for breaches

 Sinn Féin finance spokesman Pearse Doherty said it was unbelievable Davy was not holding staff accountable. File photograph: Gareth Chaney/Collins

Sinn Féin finance spokesman Pearse Doherty said it was unbelievable Davy was not holding staff accountable. File photograph: Gareth Chaney/Collins

 

Pressure mounted in the Dáil for the National Treasury Management Agency (NTMA) to cut ties with J & E Davy stockbrokers because of its failure to make individuals accountable for its regulatory breaches. Davy is the NTMA’s primary dealer in Irish Government bonds.

Sinn Féin finance spokesman Pearse Doherty said “the State cannot work with any entity or individual that puts personal gain above its regulatory requirements”, or allow it “to have any involvement in our assets and liabilities”, where there had been no resignations.

Labour finance spokesman Ged Nash said “in other countries the law views this kind of behaviour as corruption. In Ireland it’s merely a regulatory breach”, while Social Democrats joint-leader Róisín Shortall said Davy’s action “amounts to white-collar crime”.

They were speaking during a Dáil debate, and question-and-answer session, with Minister for Finance Paschal Donohoe on the banking sector.

Mr Doherty said it was “unbelievable that Davy is still not holding its team at the most senior level accountable and that we haven’t seen resignations” following the Central Bank’s record €4.13 million fine against the stockbroking firm for breaching market rules for personal gain by 16 of its employees between 2014 and 2016.

He said “it brings a whole new meaning, Minister, to the Davy slogan – ‘It’s not just business it’s personal’. Well, it was very personal for these 16 employees.”

Mr Doherty said it was also reported that those involved included “the current CEO of Davy’s and other senior executives”.

He said Davy’s apology is “a totally inadequate response, to fail to deal with the seriousness of the issue at hand.

“Corporate fines will not hold a senior individual to account and that’s why the Central Bank has been calling for a senior executive accountability regime for over three years but the legislation still has not been published.”

The Minister said Day’s behaviour “falls absolutely short of the standards that I expect and that the regulator expects”.

“I note Davy has made a statement on this matter. I note they’re considering further actions that they make take on the matter and I at this point don’t have anything further to say on it apart from echoing all the Central Bank has said on it”.

Ms Shortall said what happened was a “demonstration that there’s one law for our financial institutions, and another law for everybody else”.

She said that where there is wrongdoing like this, there has to be consequences.

“And yet again, we see that there are no serious consequences involved. And this amounts to white-collar crime.”

Ms Shortall asked if the 16 staff involved would be named publicly but Mr Donohoe said he could not do this as he did not have the information and should not have that information and “that’s why we have a regulator”.

The Minister stressed in relation to the decision of Bank of Ireland to close 103 branches, 88 of them in the State, that “I cannot mandate or overrule the internal decision-making processes in any bank, even one in which the State has a shareholding”.

Mr Doherty said that in Britain the regulator called for banks to pause all branch closures during the pandemic on the grounds that it would hurt vulnerable customers and he asked the Minister to call on Bank of Ireland to pause in its decision until there is proper consultation.

Opposition TDs also criticised the decision to allow AIB to buy Goodbody’s stockbrokers for €137 million, having sold it previously for €24 million. The move will allow AIB staff move to the firm and “dodge the bankers’ bonus levy”.