Davy apologises after initially downplaying wrongdoing in its €4.1m fine from Central Bank 

Broker apologised "unreservedly and unequivocally that these failures occurred". Picture: Sam Boal/RollingNews.ie

Davy bosses were forced into a grovelling U-turn after Ireland's largest broker appeared to deny wrongdoing in a deal that led to it being fined €4.1m by the Central Bank.   

The scandal had threatened to build into a full-scale political row involving finance minister Paschal Donohoe, because the firm holds a lucrative Government contract from the National Treasury Management Agency (NTMA) to help sell Irish sovereign bonds.

The focus on the NTMA contract had piled on the pressure because, as a seller of sovereign bonds, Davy is effectively acting as a representative of the Irish State around the world. 

Mr Donohoe told the Dáil that Davy had fallen 'gravely short of the standards of behaviour that are expected of leaders in a position of financial responsibility'.

The Central Bank had announced the €4.1m fine — the largest ever imposed on an Irish stockbroker — after Davy had failed to supervise a group of 16 employees, including top executives, in their personal account dealings in the sale of Anglo Irish bank bonds in late 2014. 

The Central Bank had also highlighted Davy’s "lack of candour" when the firm had first engaged with the regulator.  

However, in a briefing to staff on Tuesday afternoon, Davy chief executive Brian McKiernan appeared to row back on the seriousness of the Central Bank ruling, claiming there were "no findings of actual conflict of interest" in the decision.   

By Wednesday morning, Mr McKiernan was forced to issue an amended briefing to Davy staff that dropped the inaccurate claim.         

Following pressure from Mr Donohoe, the broker later issued a statement saying that it now apologised "unreservedly and unequivocally that these failures occurred".

Asked by the Irish Examiner whether Davy in the staff briefing had broken the terms of its settlement, the Central Bank said it was "satisfied that an internal circular issued yesterday by Davy to employees has been amended to ensure consistency with the public statement”. 

The scandal is the latest to put the focus back on the financial services industry, a decade after disastrous overlending by banks forced the State into a €64bn international bailout with the troika.