Demise of homegrown stalwart sent shockwaves through Cork’s finance hub
The collapse of W&R Morrogh shook the fiduciary foundations of the South Mall, home to more accountants, banks, financial advisors, insurance brokers, solicitors and stockbrokers than any other street in Ireland.
The closure by the Central Bank of W&R Morrogh in April 2001 ended an unbroken Morrogh family tradition dating back to 1887.
The hammering of W&R Morrogh resulted from the biggest securities fraud in the history of Irish business and the tarnishing of a business name that stood for probity and excellence through several generations.
Junior partner Stephen Pearson’s embezzlement of clients’ assets had precipitated the demise of W&R Morrogh and the end to Cork’s indigenous stockbroking community.
However, senior partner Alec Morrogh, 66, had been forewarned that the son of his erstwhile fellow senior partner Peter Pearson should have been more carefully monitored.
In 1993, the firm almost came unstuck when Stephen, 43, hit a rocky patch and ran up hefty losses. However, the firm was able to contain the losses and moved on, only to hit the rocks 10 years later.
It was a long journey for two former novices from the cloisters of the Benedictines to the cash fuelled world of stockbroking. Stephen came close to taking his final vows at Glenstal Abbey, Co Limerick, while Alec studied with the Benedictines in Spain where he too stopped short of holy orders.
The firm of W&R Morrogh, 74 South Mall, Cork, collapsed with debts believed to be in the region of e12m, the loss of 12 jobs and unspecified fortunes belonging to the 2,563 of firm’s clients directly impacted.
Immediate members of Stephen Pearson’s family were among those who lost heavily in the collapse & and are still waiting for & receiver Tom Grace of PricewaterhouseCoopers to release what remains of their investments.
The Pearson and Morrogh families are neighbours on Castle Road, just yards from Blackrock Castle. Since the debacle the families are barely on speaking terms.
W&R Morrogh was the only stockbroking firm in the country with its headquarters outside Dublin and the only independent stockbroking firm based in Cork.
W&R Morrogh can trace its origins back to a time when Cork had its own stock exchange and Alec is believed to be the fourth generation of the family to work in the family firm.
Alec Morrogh was regarded as conservative in the extreme, while Stephen Pearson was known to be more of a risk taker. The mix seemed to serve the firm well and barring the 1993 fiasco cover-up the firm appeared to have a charmed existence.
In 2001 Stephen’s penchant for gambling in ‘futures’ led to heavy losses and he simply sold clients assets to fund his failed investment strategies.
In the immediate aftermath of the firm’s collapse Stephen Pearson was under medical care but has over the intervening years assisted investigations by the Garda Bureau of Fraud Investigation. In pleading guilty Pearson absolved the State from a risky and expensive prosecution.
Meanwhile, Alec Morrogh has taken comfort from the good wishes and sympathy from other professionals on Cork City’s South Mall financial and legal district and from former clients. He has also worked tirelessly with PricewaterhouseCoopers to unravel the tangled web of deception woven by Stephen Pearson.
The hammering of W&R Morrogh has been a chastening experience for those who believed in the invulnerability of the South Mall and many of the denizens in its institutions have surely said to themselves: “There but for the Grace of God, go I.”
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