Morrogh clients still awaiting claims process

MORE than seven years after the collapse of stockbrokers W&R Morrogh, 45 of the firm’s clients have yet to have their claims processed by the Investor Compensation Company Limited (ICCL).

The details are included in the ICCL’s 2008 Annual Report published yesterday, which shows total reserves in its compensation funds at year end stood at €24.6 million, an increase from the previous year of €5.2 million.

To date €7.5m has been paid in compensation to some 2,500 former clients of the failed stockbroking firm W&R Morrogh which traded on Cork’s South Mall.

The total estimate of compensation payable by the ICCL in this case has now been reduced from €8.45m to €8.11m.

A provision of €720,000 has been made for the costs of the administrator appointed by the courts to certify clients claims.

The ICCL collected annual contributions from circa 4,300 member firms, in the year to 31 July 2008 €4.6m.

The report of the Morrogh Working Group, which was published by the Department of Finance in November 2006, was that rules should be developed for the distribution of client assets in circumstances where a shortfall in such assets arises following the failure of a firm.

ICCL chief operating officer Patricia Fitzgerald said: “In the absence of any other party doing so, the ICCL engaged its legal advisors to draft appropriate amending legislation and is consulting with key stakeholders to advance this matter.”

ICCL chairperson Jim Bardon, said the current difficult market conditions and the experiences in other jurisdictions reinforced their belief that the ICCL requires the ultimate back-stop of a State guarantee to facilitate it in paying compensation on a timely basis.

“Furthermore, the outcome of the Department of Finance’s intended review of the adequacy of the ICCL’s investor compensation limit (which currently stands at 90% of compensatable loss up to a maximum of €20,000) in light of the recent increase in depositor compensation from a maximum of €20,000 to €100,000, could intensify the challenges facing the ICCL in the event of a future failure,” he added.