Central Bank investigating Fexco deals
Published 20/11/2011 | 05:00
The Kerry-based financial services company Fexco is being investigated by the Central Bank for selling non-compliant investments to credit unions.
The investigation relates to the sale of capital-guaranteed investments to credit unions in 2009 and 2010.
The Sunday Independent understands that Fexco sold the investments to about 30 credit unions and that some credit unions put between 5 and 7 per cent of their entire investment portfolio into the products.
Fexco is being investigated because the investments were not listed on a recognised stock exchange at the time, as required, according to a well-placed source.
"It was a technical mistake which is being addressed now," said the source.
"Work is being done to ensure the necessary listings take place so that everything is compliant. There is no issue in relation to the financial security of the products."
Neither the Central Bank nor Fexco would comment.
In September 2010, Fexco announced it had agreed to buy Goodbody Stockbrokers from AIB. Fexco completed the purchase last January.
A spokeswoman for the Irish League of Credit Unions (ILCU) said: "We are in contact with Fexco/Goodbody on this issue and we will continue to monitor developments on behalf of the credit unions concerned. The exposure for credit unions is limited and will have no affect on members' deposits."
Fexco was set up about 30 years ago by Brian McCarthy, the executive chairman.
Former Tanaiste Dick Spring is a non-executive director of Fexco Holdings.
Sunday Indo Business