Elderfield's stockbroking probe long overdue
WHILE Bloxham's fate is a sad business, the Central Bank's probe led by Matthew Elderfield's department into the stockbroking community is welcome and long overdue.
The Central Bank is staying schtum on what sparked the probe back in December but there are no shortage of subjects that deserve scrutiny.
Bloxham had it own problems with the alleged misselling of investment bonds but it was hardly alone. Davy may not accept the findings of the regulator but it too has had its knuckles rapped for misselling bonds to credit unions a few years ago.
Another interesting topic that the probe could examine is what happened at the discretionary funds which the large brokers managed on behalf of customers during the bust.
Goodbody has previously admitted to switching large blocks of clients' funds out of Bank of Ireland stock and into AIB shares during the 2008 market turmoil.
The broker, an arm of AIB at the time, made the call in November 2008 that BoI shares should be "exited across all Goodbody discretionary portfolios" and invested in AIB shares -- with calamitous results.
Goodbody has denied suggestions that this was a "share support operation" but the decision still seems strange as the broker's own research team upgraded BoI shares to 'buy' from 'add' in the same month that those in the back office decided to sell BoI shares.
This is not the only interesting case involving Goodbody and AIB shares. The Central Bank has been sitting on a report on Goodbody's use of an investment vehicle that traded AIB shares through offshore locations in blacklisted tax havens Nevis and Vanuatu. That report, which only came to light when former auditor Eugene McErlean told a Dail committee, belongs in the public domain.