Bloxham report 'with bank' but no referrals sent to gardai or DPP
Published 17/10/2013 | 05:00
THE Central Bank has yet to refer anyone to the gardai or the Director of Public Prosecutions 17 months after the collapse of Bloxham Stockbrokers.
Bloxham, which had 17,000 private clients when it was shut by regulators in May last year, is the subject of an "ongoing investigation" by the Central Bank.
It claimed to be Ireland's oldest independent stockbroker, with most of its clients being retail investors.
The stockbroker's shutdown was ordered after a probe of all stockbrokers found it had inadequate regulatory capital.
The Irish Independent understands from a senior regulatory source that a report has been completed into the regulation of Bloxham, but the Central Bank continues to deny the existence of this report.
This is despite the fact that an in-depth report was published by the bank into the collapse of Custom House Capital, which led to losses for thousands of pensions savers.
Asked about Bloxham, the Central Bank said in a statement: "We can confirm that an extensive investigation is actively continuing and, once concluded, decisions regarding any possible future enforcement options will be made."
A spokesman for the regulator said that it did not feel it would be appropriate to publicly disclose any information about this investigation, or give reasons why it was proceeding so slowly.
"Under the confidentiality requirements as specified under Section 33AK(8) of the Central Bank Act 1942, we cannot comment on the specific details of the investigation into affairs at Bloxham," the Central Bank said.
Twelve specific questions were put to the Central Bank by the Irish Independent, asking why named individuals and institutions involved in Bloxham were not referred to the gardai.
Questions included why a report for the gardai has not been prepared by now, as it is 17 months since the collapse of Bloxham. Other queries asked if there had been a regulatory failure.
The Central Bank was asked to comment on the fact that, as the regulator of stockbroking firms, it was receiving daily reports from Bloxham.
These reports outlined the top 10 trades, the top 10 debtors, the firm's cash, its biggest positions, debts outstanding. The regulator was also receiving monthly and quarterly reports, along with annual reports.
The Central Bank insisted that it has a system for what it calls "risk-based supervision of financial firms, PRIM".
It said this makes it materially less likely that a financial firm will fail in a way which endangers financial stability or consumers.
Bloxham had been found to be cooking the books since 2007.
Officials believe Bloxham pretended to have more money than it had, and continued to trade when Central Bank rules said it should have closed.
Officials do not believe any client money is missing. But hundreds of millions of euro held by Bloxham had been put at risk, and up up to 50 people will lose their jobs.
The Central Bank has repeatedly insisted that no client funds were lost. Part of the business was transferred to Davy Stockbrokers.
However, there are now serious questions over the role of auditors Deloitte.
A spokeswoman for Deloitte had no comment.