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The Central Bank has fined stockbroker Davy 4.13 million euros for breaking market rules in relation to a transaction involving the broker’s own staff.
It is the largest fine of its kind ever imposed on a broker here.
The central bank says its investigation into Davy identified “serious problems” that required “the imposition of a significant financial penalty.”
The transaction in question took place in November 2014.
What the central bank calls a “consortium” of 16 Davy employees, including a group of top executives, bought bonds from a client at an agreed price.
But the client was not informed that the consortium consisted of Davy employees.
The central bank said that by allowing the transaction to proceed, Davy had acted “recklessly.”
It prioritized making it easier for the group of employees to “make a financial profit” rather than sticking to the rules and posed a risk to the client, the central bank added.
To make matters worse, the central bank said that when it contacted Davy, stockbrokers had provided “vague and misleading details.”
He also withheld information.
The Central Bank considered this as “an aggravating factor” in the case.
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