Central Bank watchdog worked at fined firm
Published 25/03/2012 | 05:00
Merrion failed to report details of share trades it made for clients
The Central Bank's stockbroking watchdog Michael Hodson headed up a firm that has been fined €65,000 for regulatory breaches -- most of which took place during his time there.
Michael Hodson was a major shareholder and a director of Merrion Stockbrokers for more than 10 years until November 2010, according to Companies Office records. He was also a founder and finance director at Merrion Capital Group, the owner of the stockbroking house.
Hodson has been Head of Stockbroking Supervision at the Central Bank since October last.
Merrion Stockbrokers was fined €65,000 last Wednesday for failing to report details of share trades made on behalf of clients.
It failed to report 12,020 transactions in next-day reports to the Central Bank between November 2007 and August 2011 and to report correctly whether the transactions were 'buys' or 'sells', according to the Central Bank.
Then during a review carried out by Merrion itself the firm identified a further 10,708 unreported transactions, which it flagged with the Central Bank.
Mr Hodson was a director and part owner of Merrion Stockbrokers until late 2010.
The firm had failed to establish "adequate policies and procedures", the Central Bank said, to comply with European regulations on financial trading. However, it accepted they were "unintended" and swiftly rectified by the firm.
Stockbroking Supervision was where issues such as those which arose at Merrion Stockbrokers would be identified, a Central Bank spokesman told the Sunday Independent.
"These regulations are important for detecting any market abuse or insider trading," said Kevin Doherty of Compliance Ireland, who was a consultant for Merrion on this issue but was commenting independently and generally.
NCB Stockbrokers, Davy, and Susquehanna International Securities were fined for similar issues in December.
A spokesman for the Central Bank said that there were "completely separate reporting lines" between Mr Hodson's department and the transaction reporting team that dealt with the breach.
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