Leading Irish stockbroking firm Bloxham ordered to cease trading

One of Ireland's leading stockbrokers has been ordered to cease trading after a watchdog raised concerns over its levels of financial reserves.

The Central Bank alerted the firm last Thursday evening and has since ordered it to stop all regulated activities.

Bloxham confirmed the issues related to the reporting and accounting of income which was overstated over a number of years.

"The financial partner of the firm was immediately suspended and the Central Bank informed," the stockbroker said.

"On foot of their initial investigations the remaining partners in the firm, who were unaware of these issues, have asked a firm of forensic accountants to verify the position and assist in further investigations."

Bloxham said the impact of the misreporting is that it no longer holds sufficient capital to meet the licensing requirements of the Central Bank to trade as a stockbroker.

The Central Bank ordered that the firm stop all regulated activities and transfer all private client and fund management business to its larger rival on the Dublin trading floors, Davy.

The trading ban came into effect today, the Central Bank of Ireland said.

"At 5pm last Friday, the Central Bank imposed directions on Bloxham to cease all regulated activities, with immediate effect," it said.

"Early this morning, Bloxham agreed to transfer all private client and fund management business to Davy."

The Central Bank's market supervision directorate will continue investigations.

Davy has acquired the Bloxham's management business which manages more than €700m worth of holdings.

Along with the deal to take over Bloxham's private client business, announced last March, Davy has added about €1.2bn worth of assets to its business.

Tony Garry, Davy chief executive, said they are two profitable and established businesses.

"The transition to Davy is a very positive development for Bloxham's asset management clients who will continue to be serviced by the same award winning team, but as part of a much larger and well capitalised business," he said.

Pramit Ghose, managing partner of Bloxham, said the deals have been handled with expertise and professionalism.

"That relationship has progressed well and when the requirement arose to address our capital requirements, Davy, as a well resourced and market leading regulated entity was the obvious party," he said.

"We look forward to joining the Davy team and to enhancing the range and depth of services to all of our clients."

Bloxham's asset management business and its Irish developed funds are distributed by both Irish Life and New Ireland and these will move across to Davy along with the asset management team, led by Mr Ghose.