Central Bank at Oireachtas Finance Committee today

Jim O'Callaghan : In what way did Davy's try to mislead the Central Bank?

Derville: Their first engagement tried to downplay.
Our diligent enforcement investigation subsequently showed the lack of candour.

I can't go beyond the statement we issued

Jim: You said that they tried to show some individuals more centrally involved than they were

Derville: They tried to characterise it differently from what it was

Jim: Davy compliance was misled by a committee member. When

Derville: I am constrained by what I can say.
The enforcement action was resolved in a settlement agreement. The information put into the public domain is agreed with the firm as part of that agreement.

The second method is by way of a public hearing...

This was a very contentious investigation. So yes, our staff used their statutory powers as authorised officers.

Jim: Are the contraventions criminal offences?

Derville: No, they are not designated as very serious regulatory breaches

Jim: Are you sure?

Derville: Yes. They are regulatory provisions as actionable matters under the sanctions regime.

Some provisions are also criminal, these are not.

Jim: Did other customers of Davy's lose out in a similar way?

Derville: This is not our first engagement with the firm. We want external reviews to ensure that.

Some breaches are criminal. Some are civil. Some are both.

The CB has the power to prosecute summarily. But these are not deemed criminal.
 
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Pearse: Will investigations be opened into the individuals?

Derville: As we speak, we are involved in significant regulatory engagement in Davy's. I can't comment any further.

We keep all our options open and we don't prejudice our actions with commentary.

Pearse: Presses. Does the resignation prevent the Central Bank from taking action against individuals.

Derville: This is a live supervisory matter. I can't speak about enforcement matters.
This enforcement action is against the firm.
Once the enforcement is finished against the firm, we can turn to taking action against individuals.

There are other options - e.g. fitness and probity scheme - that is protective and not a punishment scheme.

Section 31 - The firm themselves must ensure that the people are fit and proper. Davys has confirmed than none of the 16 people is still working for the firm.

Pearse: Did the CB insist on this?

Derville: I can't comment. I believe that our diligent pursuit of this matter demonstrates our commitment to holding firms to account. And we demand change.

Pearse: Did you uncover anything you needed to refer to the Gardai or the ODCE. And did you do so?

Derville: We did not form that opinion. But we are happy to engage with other agencies now that everything is out in the open.

Pearse: The three top guys are directors of Whitenote Ltd and other companies which own shares in Davy's. Are these companies regulated?

Derville: We authorise firms and the fitness and probity of individuals with senior roles. As a general comment, we have roles with scrutinising the shareholding in regulated entities.

Pearse: Can you assure us that none of the 16 people is working in financial services.

Derville: This is a live supervisory issue so I can't be drawn into answering this question.

Pearse: When did the lack of candour and litigiousness stop?

Derville: We have experienced a challenging approach to this throughout the entirety of this investigation. We expected it to go to a contested hearing at an enquiry.

Pearse: The current CEO is Bernard Byrne. Is there a question for Mr Byrne to outline his role in the challenges to this investigation.

We can't understand how after a 6 year investigation, they get a 30% reduction for an early settlement discount. 6 years, legal challenges, misleading, lack of candour, is not early settlement.

Derville: It's similar to the criminal law where people get a discount for pleading guilty.
 
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