Former Davy employees seek to strike out businessman's claim over bonds sale

Property developer claims 17 former employees allegedly made a multi-million profit from the sale of his Anglo Irish Bank bonds

It is claimed in proceedings initiated last year that the 17 Davy employees made a secret profit of €25m in the onward sale of Anglo Irish Bank bonds.

The High Court has been asked to strike out a businessman's claim that he was fraudulently misled by Davy Stockbrokers and 17 of its former employees when they allegedly made a multi-million profit from the sale of his Anglo Irish Bank bonds.

Sixteen of the 17 former Davy employees say Patrick Kearney's claim is based on pleadings which are untrue.

They claim various statements and pleadings by Mr Kearney are false and warrant his case being struck out. Mr Kearney, a Belfast-based property developer, opposes their application and says it is unmeritorious.

Mr Kearney and his firm Kilmona Holdings employed Davy in 2014 to sell the bonds at best market price to go towards the settlement of debts.

However, it is claimed in proceedings initiated last year that the 17 Davy employees made a secret profit of €25m in the onward sale.

Seven years ago, Mr Kearney first sued Davy, claiming the bonds had been sold at an under-valued price but that case was later settled.

In 2021 however, Mr Kearney said he learned something he did not know in 2015 following a Central Bank investigation into Davy for market rule breaches which resulted in a record €4.1m fine against the broker. 

Mr Kearney said it was only then he learned that the onward sale to the "O'Connell Partnership" was an entity comprising 16 former Davy employees. He said if he had known that when he settled the previous case, he would not have done so. 

In his 2021 proceedings, he alleged, among other things, fraudulent concealment. He also sought a number of declarations including that O'Connell Partnership was under the control of Davy, which was paid €207,000 to sell the bonds, in breach of loyalty and duty to him and his company.

He claimed he did not know the partnership comprised Davy employees because when he asked Davy for details about it, he was told this could not be done because of confidentiality. The claims are denied.

On Tuesday, 16 of the O'Connell Partnership members asked the court to strike out Mr Kearney's claim as bound to fail. 

The 17th partnership member is reserving his position in relation to a strike-out application pending the hearing of the motion brought by the others.