Bloxham Stockbrokers ordered to cease trading
A 150-year-old Irish stockbroking firm has been ordered to cease trading and is suspended from the Dublin trading floor for accounting irregularities.
Bloxham was found to have financial errors in its returns going back five years after industry watchdogs raised the alarm last Thursday.
It is believed the stockbroking firm was holding assets in reserve which should have totalled €5.8m, not as reported.
The financial partner, named on the Bloxham website as Tadhg Gunnell, is suspended with immediate effect.
The firm said: "On foot of their initial investigations the remaining partners in the firm, who were unaware of these issues, have asked a firm of forensic accountants to verify the position and assist in further investigations."
Accountants from KPMG have been called in to examine the books while the Central Bank of Ireland, which first raised concerns, has also launched an inquiry.
Bloxham said the impact of the misreporting is that it no longer holds sufficient capital to meet the licensing requirements to trade as a stockbroker.
It insisted no client funds were put at risk.
Mr Gunnell joined the firm in 2000 from Deloitte, where he was an audit and assurance manager, and was made a partner at Bloxham in 2005.
He oversaw the finance and compliance division.
The Central Bank ordered a stop on all regulated activities and that all private client and fund management business be transferred to its larger rival on the Dublin trading floors, Davy.
The trading ban came into effect this morning.
Bloxham said: "At 5pm last Friday the Central Bank imposed directions on Bloxham to cease all regulated activities, with immediate effect.
"Early this morning Bloxham agreed to transfer all private client and fund management business to Davy."
The Central Bank's market supervision directorate will continue investigations.
Davy has acquired Bloxham's management business which looks after more than €700m-worth of holdings. Along with the deal to take over Bloxham's private client business, announced last March, Davy has added about €1.2bn worth of assets to its business.
Tony Garry, Davy chief executive, said they are two profitable and established businesses.
"The transition to Davy is a very positive development for Bloxham's asset management clients who will continue to be serviced by the same award-winning team but as part of a much larger and well capitalised business," he said.
Pramit Ghose, managing partner of Bloxham, said the deals have been handled with expertise and professionalism.
"That relationship has progressed well and when the requirement arose to address our capital requirements Davy, as a well resourced and market-leading regulated entity, was the obvious party," he said.
"We look forward to joining the Davy team and to enhancing the range and depth of services to all of our clients."
Bloxham's asset management business and its Irish-developed funds are distributed by both Irish Life and New Ireland and these will move across to Davy along with the asset management team, led by Mr Ghose.
The Irish Stock Exchange announced that Bloxham was suspended as a member firm in Dublin.