Davy CEO resigns after bond deal revelations
The chief executive of Ireland’s largest brokerage resigned as the fallout continued after revelations that a group of company employees and executives sought to cash in on a bond deal by secretly taking the opposite side of the deal of a client.
The Davy Group said on Saturday it had accepted with immediate effect the resignations of Managing Director Brian McKiernan, Bond Director Barry Nangle and Non-Executive Director Kyran McLaughlin “following the recent settlement agreement between Davy and the Central Bank. of Ireland ”.
The central bank of Ireland last Tuesday fined Davy € 4.1m after noting that 16 of his staff, including some senior executives, were looking to profit by secretly taking the opposite side of a client’s bond deal in 2014. The central bank criticized the “framework weak internal control ”of the brokerage firm for not having managed conflicts of interest and personal accounts.
Opposition MPs have called the government to remove Davy from the list of authorized market participants as the prime broker of Irish government bonds in response to the scandal. The Treasury called the findings of the central bank’s investigation “very serious” but has so far not broken ties.
Following Saturday’s resignation, Davy will be led on an interim basis by Bernard Byrne, his current deputy CEO who joined the company at the end of 2018 after a five-year stint as managing director of Ireland’s largest bank AIB.
“As we reflect on the Central Bank’s investigation, our priority now is to restore confidence in the integrity and robustness of our environment and control culture, and to ensure that we provide our clients with the level of service and protection to which I know our employees are committed. Davy President John Corrigan said Saturday.
Davy’s board will now be fully composed of directors appointed after 2014. Davy said the board’s review of the central bank’s investigation findings was “ongoing.”
The Irish central bank has been scathing in its assessment of Davy’s failures, with its enforcement and anti-money laundering director Seána Cunningham describing how Davy’s checks were “easily avoided”.
The central bank has been criticized for failing to publicly name or individually censor the staff members involved. Some have been named in the Irish media.
After initially remaining silent on the fine, Davy said on Wednesday that he “deeply regrets the shortcomings that emerged from the Central Bank of Ireland investigation and unreservedly and unequivocally apologizes that these failures have occurred ”.