The general secretary of the Financial Services Union, John O’Connell, has called for a thorough, independent review of the operation of stockbroker Davy.
His call follows the decision of the Central Bank regulator last Tuesday to fine Davy €4.1 million and to reprimand the firm after finding that 16 staff, including top executives, had sought to make a profit by taking the other side of a bond deal involving a client in 2014 — without telling the regulator or the firm’s compliance team.
Mr O’Connell told RTÉ radio’s Morning Ireland that the fine was not sufficient as a deterrent given the lack of transparency about what had happened.
There was a reputational issue for the entire sector, he said. That needed to be addressed and investigated further and questions had to be answered such as why did the investigation take so long?
Mr O’Connell said there was a fear about the culture within the sector. Why had no one been prepared to speak out? Why had SEAR (Senior Executive Accountability Regime) legislation not been put in place, he asked.
When asked about Davy continuing to handle bond sales for the State, Mr O’Connell said that the Government had to answer that question and that the public was looking to the Government to lead and to show that when there was ‘wrong doing’ there were consequences.
Davy representatives should come before the Public Accounts Committee to “explain themselves”. Their responses to date had been “vague and misleading” and they needed to account for themselves, he said.
The FSU was concerned about the sector in general, he added. Was this (Davy) a once off, or is such behaviour inbuilt in DNA of some financial institutions.
There was a need to “get to the heart of it” quickly and for those responsible to take account for what they had done. Why had controls been easily circumvented? This shows that the sector was not capable of policing itself.