What happened to company and is clients' money safe?
Q : Bloxham stockbrokers. Should I have heard of them?
A: Well, they are smaller and older than larger rivals such as Davy and Goodbody but there is no doubt that they are movers and shakers.
Q: So what's all this about financial irregularities?
A: The Central Bank surprised everybody yesterday morning by announcing that Bloxham had been ordered to stop trading because a probe had uncovered problems.
Q: What sort of problems?
A: The Central Bank says Bloxham was artificially inflating its capital ratio. That's the amount of money a broker has stashed away and it determines what sort of risks it can take.
Q: Still, it doesn't sound like the worst of mistakes?
A: You are both right and wrong. The good news is that none of Bloxham's 16,000-plus clients will lose a cent. Their money is safe and most of it has been transferred to Davy stockbrokers. The bad news is that Bloxham is unlikely to reopen, which means that up to 50 people are out of a job and people who invest in shares have fewer options when picking a broker.
Q: Who is at fault here?
A: It is much too early to say. Two inquiries have been launched and there is no point in jumping to conclusions but there are a few people who must share some of the blame. The partners will be kicking themselves and will pay a heavy price. It is an unlimited partnership, which means they are liable for the costs. Auditors Deloitte will also be under scrutiny because it is the job of auditors to pick these things up.
Q: Deloitte. Why do I keep hearing the name Deloitte?
A: Deloitte is regularly employed by the State to audit companies and is the current auditor of that wonderful institution IRBC, which most of us still call Anglo Irish.
Q: What kind of customers does Bloxham have? Is this for rich guys?
A: It has somewhere between 16,000 and 17,000 customers and you can assume many of them are rich -- but many of the customers will be charities or families that have children who were given awards by the courts and that sort of thing. Credit unions are also a customer, so you might have been indirectly exposed. Bloxham has also sold a lot of funds, which are distributed by both Irish Life and New Ireland.
Q: Crumbs, I think I have one of those lying around somewhere. Am I safe? What's happened to it?
A: All these funds have been moved across to Davy. So you are safe.
Q: I still don't feel good about this. Now I think about it, Aunty Nora from Nenagh left me a fund arranged by Bloxham or something similar.
A: If you have any questions, ring Davy on (01) 611 9200. It has set up a helpline but will also be writing to you in a while.