9th Mar 2021 06:57
(Alliance News) - The Irish Treasury on Monday said it has withdrawn J&E Davy's authority to act as a primary dealer in Irish government bond auctions, effective immediately.
The action follows the announcement early last week by the Irish central bank that it had fined Ireland's largest stockbroker EUR4.1 million over a bond deal in which a group of staff and executives took the opposite side of a client's trade.
The board of the National Treasury Management Agency said on Monday that it reached its decision after assessment of the "very serious findings" about Davy by the central bank and after speaking with investors in Irish government debt.
"A primary concern for the NTMA is to maintain the reputation of Ireland as a sovereign issuer in the bond market and the orderly functioning of the market for Irish government debt," the agency said.
In response, Davy Group said Monday evening it is closing its bond desk with four redundancies, the Financial Times reported.
The bond team follow out chief executive Brian McKiernan, who stepped down on Saturday together with head of bonds Barry Nangle and non-executive director Kyran McLaughlin. Davy will be led on an interim basis by Deputy CEO Bernard Byrne, who joined from lender AIB Group PLC in 2018.
On Tuesday last week, the Central Bank of Ireland said it fined J&E Davy EUR4.1 million, citing four breaches of regulations that occurred between July 2014 and May 2016.
In its announcement, the central bank said its investigation was prompted by a transaction that took place in November 2014. It was undertaken for the client by a group of 16 Davy employees, including senior executives, the central bank said.
By Tom Waite; [email protected]
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