A Cork stockbroker who used clients’ funds to trade on the stock market has pleaded guilty to 47 charges of defrauding a total of over €4.5 million.
Stephen Pearson (43), a former Benedictine monk, from North Esk, Glanmire, pleaded guilty at Dublin Circuit Criminal Court to 32 charges of fraudulently converting clients’ funds, 11 charges of forgery and four counts of obtaining funds under false pretences while a junior partner W&R Morrogh on dates between November 1995 and April 2001.
W&R Morrogh was established in 1887 and was one of the most reputable stockbrokers in Cork. It had 9,000 clients and was registered with both the Irish and London Stock Exchange.
Detective Sergeant Denis Heneghan, of the National Bureau of Fraud Investigation, told the court that in 2001 the Central Bank contacted the Bureau after W&R Morrogh failed to make its annual return that had been due on April 24th that year.
The Central Bank had subsequently contacted the company in an effort to get the return.
Alec Morrogh investigated the delay in submitting the return along with other staff members which led to them discovering financial irregularities in how the firm had been managed. This was reported back to the Central Bank, which then ordered the company to cease trading.
W&R Morrogh subsequently went into receivership with a total loss of an estimated €7,000,000.
Det Sergeant Heneghan said the Garda investigation focused on 25 clients of W&R Morrogh, which represented a cross section of their 9,000 clients. It revealed that Pearson had used the funds of and obtained funds under false pretences from 20 of these clients.
Pearson used the pseudonym of "Gerard Stevens" to trade in options and futures in the stock market. He also set up a number of bogus accounts to allow him to transfer the stolen monies into.
Judge Hogan remanded Pearson on continuing bail and adjourned sentencing to October 12 th.