Davy taps A&M for forensic investigation into operations

30 March 2021 Consultancy.uk 2 min. read

Alvarez & Marsal has been appointed by Davy to carry out an independent internal review of its operations, including relevant staff trading, over the past seven years. The consultancy will examine the organisation after it was stung with a fine for regulatory breaches.

"The review will include a forensic assessment, the scope of which will be determined by Alvarez & Marsal (A&M), of relevant staff trading from 2014 to 2021 and of any other relevant activity," Davy commented in a statement. "It will also assess the adequacy of enhanced compliance, controls and governance designed to prevent conflicts of interest."

The news comes weeks after Davy was fined €4.1 million by Ireland’s Central Bank for a number of regulatory breaches related to a 2014 transaction. The financial institution reprimanded 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 him or the firm’s compliance team.

Davy taps A&M for forensic investigation into operations

The controversy led to three senior figures in Davy resigning, as well as the closure of the company's bond desk after the National Treasury Management Agency withdrew its authority to act as a primary dealer in Irish Government bonds. Meanwhile, Davy’s board announced it had decided to pursue a sale of the business.

In the meantime, the internal inquiry is being seen as another necessary step towards restoring trust in the company. The probe will be conducted by an A&M team based in London, with the firm having had no known prior connection with Davy.

Also in the firm’s statement, Davy said A&M has wide international experience in forensic and regulatory investigations. It added that Davy's board is committed to sharing the findings of the independent review, although it is not yet clear what form that might take.

Established in 1926, the Davy Group is a wealth management and capital markets specialist. The firm is over 700 people strong, managing more than €14 billion of client assets, with offices in Dublin, Cork, Galway, Belfast, London and Luxembourg.