Public statement relating to Settlement Agreement between the Central Bank of Ireland and J&E Davy

• Date: 02 March 2021

ENFORCEMENT ACTION

Central Bank of Ireland

and

J&E Davy

J&E Davy fined €4,130,000 and reprimanded by the Central Bank of Ireland for regulatory

breaches arising from personal account dealing

On 1 March 2021, the Central B ank of Ireland (the Central Bank) reprimanded and fined J&E

Davy (Davy) €4,130,000 in respect of four breaches of the European Communities (Markets in

Financial Instruments) Regulations 2007 (the MiFID Regulations) that occurred over different

intervals between July 2014 and May 2016.

The Central Bank’s investigation arose from a transaction a group of 16 Davy employees (the

Consortium) undertook in a personal capacity with a Davy client (the Client) in November 2014

(the Transaction). Within the Consortium was a group of senior executives (the Committee). In

permitting the Transaction, Davy prioritised facilitating an opportunity for the Consortium to

make a personal financial gain over ensuring that it was complying with its regulatory

obligations. The Transaction highlighted a weak internal control framework within Davy in

relation to conflicts of interest management and personal account dealing. All of this served to

create an elevated risk of investor detriment.

Following details about the Transaction becoming public four months after it occurred, Davy

contacted the Central Bank to provide an explanation. At that stage, Davy failed to disclose the

full extent of the wrongdoing. This lack of candour was treated as an aggravating factor in this

case.