Davy Stockbrokers
Encyclopedia
Davy is Ireland's largest stockbroker, wealth manager and financial advisor and has offices in Dublin, Belfast
, Cork
, Galway
and London
. Davy offer a range of services to private clients, small businesses, corporations and institutional investors.
Capital Markets business offers clients services relating to the Irish equity market and European building materials, airline and gaming sectors, with a parallel offering in the international debt and currency markets. Activities are split into Institutional Equity Sales and Trading, Debt & Specialist Finance, Money Broking and Corporate Broking.
Corporate Finance business works with domestic and overseas companies, to provide a range of integrated corporate finance services.
Private Clients business works with individuals, charities and companies to meet their wealth management needs through financial planning, investment management and asset selection.
Research business provides analysis across a range of sectors to help clients make more informed investment decisions.
As the leading broker in the Irish market, Davy accounted for approximately 40 per cent of all dealings in Irish equities on the Irish Stock Exchange in 2009 and is the only domestically based primary dealer in Irish Government Bonds and acts as arranger on most Irish corporate bond issues. Its acts as broker to 9 of the top 10 companies listed on the Irish Stock Exchange
and 15 out of the 24 companies listed on the ESM (Ireland’s
equivalent of AIM
). Davy is also responsible for circa 70 per cent of funds raised on the
Irish Stock Exchange. Ireland has two large (one of which is Davy), and half a dozen medium-sized brokerages. According to its 2009 Summary Financial Statement, the company had net current assets of €123.2m at the end of 2009 with shareholders' funds of €135.6m.
and James, on the advice of his UCD economics professor, decided to enter stockbroking after graduating with a degree in Economics, while Eugene graduated with a Law degree.
In 1926, a few years after Irish independence, James Davy became a member of the Dublin Stock Exchange and was soon joined by his brother Eugene to establish J&E Davy, with its first office located on Westmoreland Street. At the time, Irish stockbroking was dominated by brokers who trained in London and lacked a more specific Irish perspective. The bulk of business consisted of buying and selling major British-quoted shares for private clients. It was in this environment that J&E Davy set about building up a stockbroking business. Over the next two decades the two brothers gradually built up the company by tapping into the slowly emerging Catholic
middle class, (the majority of its competitors being run by Protestants). It was also helped by Eugene Davy
's contact's obtained through playing rugby
, being capped 34 times for Ireland
, acting as manager of the national team, and eventually becoming President of the IRFU.
Their respective sons Brian and Joseph began to take control of the broker in the 1960s. In 1988 Bank of Ireland
acquired a majority stake in Davy and increased that to 90% in 1992. In 2006, it became independent again following a management and staff buy-out of the company with loans provided by Anglo Irish Bank
for €316 million, a figure acknowledged to reflect top of market conditions. In August 2010 Davy opened its first overseas office in London.
, which ended in his personal account at Irish Life & Permanent plc.
The next year the firm was the subject of an Irish Stock Exchange
inquiry over the handling of the floatation of Greencore plc, the recently privatised Irish Sugar Company. The then Taoiseach, Albert Reynolds
did not hold back in his criticism "you employ professional people to do the job...it was not done in a professional manner." The Managing Partner resigned.
Davy admitted that its representatives in 1999 devised a Liechtenstein
based tax evasion scheme uncovered by the public service broadcaster, RTE
.
In a high profile 2005 insider dealer case, the chief executive of Fyffes
plc whose shares were the subject of the illicit trading said that he was "set up" by Davy and misled by a presentation to investors by Davy on behalf of his company. He also told the High Court he believed there was an arrangement between Davy and the party found responsible by the courts of insider dealing for the purpose of selling the shares they held in his company.
Two reports of an investigation into the "wholly inappropriate sale of perpectual bonds" by Davy to credit unions failed to involve any of the credit unions affected, leaving them "in the dark and powerless to add any value to the findings of this investigation”. The Irish Stock Exchange
, who has Davy as one of its largest shareholders, and the Central Bank of Ireland then declined to give them access to the reports. The Chairman of one the Credit Union's who suffered large losses told his members ‘‘The failure to publish the reports is to place the complaints process in a shroud of secrecy. Such a failure of openness, transparency and fairness can only serve to undermine confidence in the complaints process, forcing those with grievances into the courts. Such a course of action is not in the interest of any of the stakeholders.”
The broker attracted adverse criticism for continually writing glowing reports about its largest client and former owner Bank of Ireland
by always setting price targets about the current market price. In February 2008 with the price at €9.59 it wrote "A low risk balance sheet and cheap valuation provide a safe place to hide...This is a low risk bank." 13 months later the price was at €0.12.
Davy invested on behalf of its clients €411 million to purchase the Irish Glass Bottle Site, in Ringsend
, Dublin, in 2006, wrote off €452.8 million in its 2008 financial year. The 25-acre site, which is the company’s sole asset, was given a valuation of €50 million in the accounts.
Enfield Credit Union agreed to accept a €35 million offer from Davy to credit unions affected by the sale of investment bonds to settle its claim against the stockbroking firm that it claimed Davy mis-sold to them. The terms secured by Enfield’s advisers also applied to all the credit unions who are nursing losses of about €75 million on the €183 million worth of bonds Davy sold to them. Around 100 credit unions suffered a second round of losses because the bond that Davy acquired to compensate them for the earlier losses itself crashed in value.
Hundreds of clients of Davy, including former Anglo Irish Bank
chairman Sean FitzPatrick
. built up a 15pc stake in the American educational publisher, EMPG
, as they participated in two equity-raisings—totalling more than $400m. The investors lost all of their money and the broker wrote to its clients apologising for not communicating more about their losses.
In 2010 the Central Bank of Ireland forced the broker to inform the effected clients of two adverse findings against them as an instrument sold "was not compliant with the Trustees (Authorised Investments) Order at the time of its sale as it was not listed on a recognised Stock Exchange’’ and ‘‘Davy had dealt as principal in the purchase and sale of the bond and was in breach of the rules of the Irish Stock Exchange
by not disclosing this fact on its contract note’’ to the investors. The effected parties, who lost many millions, were said to be reviewing their legal options.
Belfast
Belfast is the capital of and largest city in Northern Ireland. By population, it is the 14th biggest city in the United Kingdom and second biggest on the island of Ireland . It is the seat of the devolved government and legislative Northern Ireland Assembly...
, Cork
Cork (city)
Cork is the second largest city in the Republic of Ireland and the island of Ireland's third most populous city. It is the principal city and administrative centre of County Cork and the largest city in the province of Munster. Cork has a population of 119,418, while the addition of the suburban...
, Galway
Galway
Galway or City of Galway is a city in County Galway, Republic of Ireland. It is the sixth largest and the fastest-growing city in Ireland. It is also the third largest city within the Republic and the only city in the Province of Connacht. Located on the west coast of Ireland, it sits on the...
and London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
. Davy offer a range of services to private clients, small businesses, corporations and institutional investors.
Current Overview
Employing over 420 people, Davy is an independent company owned by management and staff. Company operations are centered around four interrelated business areas – Capital Markets, Corporate Finance, Private Clients and Research.Capital Markets business offers clients services relating to the Irish equity market and European building materials, airline and gaming sectors, with a parallel offering in the international debt and currency markets. Activities are split into Institutional Equity Sales and Trading, Debt & Specialist Finance, Money Broking and Corporate Broking.
Corporate Finance business works with domestic and overseas companies, to provide a range of integrated corporate finance services.
Private Clients business works with individuals, charities and companies to meet their wealth management needs through financial planning, investment management and asset selection.
Research business provides analysis across a range of sectors to help clients make more informed investment decisions.
As the leading broker in the Irish market, Davy accounted for approximately 40 per cent of all dealings in Irish equities on the Irish Stock Exchange in 2009 and is the only domestically based primary dealer in Irish Government Bonds and acts as arranger on most Irish corporate bond issues. Its acts as broker to 9 of the top 10 companies listed on the Irish Stock Exchange
Irish Stock Exchange
-History:The Irish Stock Exchange is Ireland's only stock exchange and has been in existence since 1793. It is an Irish private company limited by guarantee. It was first recognised by legislation in 1799 when the Irish Parliament passed the Stock Exchange Act...
and 15 out of the 24 companies listed on the ESM (Ireland’s
equivalent of AIM
Alternative Investment Market
AIM is a sub-market of the London Stock Exchange, allowing smaller companies to float shares with a more flexible regulatory system than is applicable to the main market....
). Davy is also responsible for circa 70 per cent of funds raised on the
Irish Stock Exchange. Ireland has two large (one of which is Davy), and half a dozen medium-sized brokerages. According to its 2009 Summary Financial Statement, the company had net current assets of €123.2m at the end of 2009 with shareholders' funds of €135.6m.
History
James and Eugene Davy were raised in RathminesRathmines
Rathmines is a suburb on the southside of Dublin, about 3 kilometres south of the city centre. It effectively begins at the south side of the Grand Canal and stretches along the Rathmines Road as far as Rathgar to the south, Ranelagh to the east and Harold's Cross to the west.Rathmines has...
and James, on the advice of his UCD economics professor, decided to enter stockbroking after graduating with a degree in Economics, while Eugene graduated with a Law degree.
In 1926, a few years after Irish independence, James Davy became a member of the Dublin Stock Exchange and was soon joined by his brother Eugene to establish J&E Davy, with its first office located on Westmoreland Street. At the time, Irish stockbroking was dominated by brokers who trained in London and lacked a more specific Irish perspective. The bulk of business consisted of buying and selling major British-quoted shares for private clients. It was in this environment that J&E Davy set about building up a stockbroking business. Over the next two decades the two brothers gradually built up the company by tapping into the slowly emerging Catholic
Catholic
The word catholic comes from the Greek phrase , meaning "on the whole," "according to the whole" or "in general", and is a combination of the Greek words meaning "about" and meaning "whole"...
middle class, (the majority of its competitors being run by Protestants). It was also helped by Eugene Davy
Eugene Davy
Eugene O'Donnell Davy was an Irish international rugby union fly-half.Davy was born into an affluent family in County Dublin on 26 July 1904. He was one of nine surviving children of Thomas Davy, a merchant, and his wife Alice...
's contact's obtained through playing rugby
Rugby football
Rugby football is a style of football named after Rugby School in the United Kingdom. It is seen most prominently in two current sports, rugby league and rugby union.-History:...
, being capped 34 times for Ireland
Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...
, acting as manager of the national team, and eventually becoming President of the IRFU.
Their respective sons Brian and Joseph began to take control of the broker in the 1960s. In 1988 Bank of Ireland
Bank of Ireland
The Bank of Ireland is a commercial bank operation in Ireland, which is one of the 'Big Four' in both parts of the island.Historically the premier banking organisation in Ireland, the Bank occupies a unique position in Irish banking history...
acquired a majority stake in Davy and increased that to 90% in 1992. In 2006, it became independent again following a management and staff buy-out of the company with loans provided by Anglo Irish Bank
Anglo Irish Bank
Anglo Irish Bank was a bank based in Ireland with its headquarters in Dublin from 1964 to 2011. It went into wind-down mode after nationalisation in 2009....
for €316 million, a figure acknowledged to reflect top of market conditions. In August 2010 Davy opened its first overseas office in London.
Controversy
In 1992, Davy made a political donation of £5,000 to Bertie AhernBertie Ahern
Patrick Bartholomew "Bertie" Ahern is a former Irish politician who served as Taoiseach of Ireland from 26 June 1997 to 7 May 2008....
, which ended in his personal account at Irish Life & Permanent plc.
The next year the firm was the subject of an Irish Stock Exchange
Irish Stock Exchange
-History:The Irish Stock Exchange is Ireland's only stock exchange and has been in existence since 1793. It is an Irish private company limited by guarantee. It was first recognised by legislation in 1799 when the Irish Parliament passed the Stock Exchange Act...
inquiry over the handling of the floatation of Greencore plc, the recently privatised Irish Sugar Company. The then Taoiseach, Albert Reynolds
Albert Reynolds
Albert Reynolds , served as Taoiseach of Ireland, serving one term in office from 1992 until 1994. He has been nominated for the Nobel Peace Prize...
did not hold back in his criticism "you employ professional people to do the job...it was not done in a professional manner." The Managing Partner resigned.
Davy admitted that its representatives in 1999 devised a Liechtenstein
Liechtenstein
The Principality of Liechtenstein is a doubly landlocked alpine country in Central Europe, bordered by Switzerland to the west and south and by Austria to the east. Its area is just over , and it has an estimated population of 35,000. Its capital is Vaduz. The biggest town is Schaan...
based tax evasion scheme uncovered by the public service broadcaster, RTE
RTE
RTÉ is the abbreviation for Raidió Teilifís Éireann, the public broadcasting service of the Republic of Ireland.RTE may also refer to:* Recep Tayyip Erdoğan, 25th Prime Minister of Turkey...
.
In a high profile 2005 insider dealer case, the chief executive of Fyffes
Fyffes
-History:In the 1870s Thomas Fyffe, a London food wholesaler, went into partnership with a fruit dealer named Hudson who had connections in the Canary Islands. In 1878 they shipped their first cargo of bananas to England. Within five years the business had become so successful that they purchased...
plc whose shares were the subject of the illicit trading said that he was "set up" by Davy and misled by a presentation to investors by Davy on behalf of his company. He also told the High Court he believed there was an arrangement between Davy and the party found responsible by the courts of insider dealing for the purpose of selling the shares they held in his company.
Two reports of an investigation into the "wholly inappropriate sale of perpectual bonds" by Davy to credit unions failed to involve any of the credit unions affected, leaving them "in the dark and powerless to add any value to the findings of this investigation”. The Irish Stock Exchange
Irish Stock Exchange
-History:The Irish Stock Exchange is Ireland's only stock exchange and has been in existence since 1793. It is an Irish private company limited by guarantee. It was first recognised by legislation in 1799 when the Irish Parliament passed the Stock Exchange Act...
, who has Davy as one of its largest shareholders, and the Central Bank of Ireland then declined to give them access to the reports. The Chairman of one the Credit Union's who suffered large losses told his members ‘‘The failure to publish the reports is to place the complaints process in a shroud of secrecy. Such a failure of openness, transparency and fairness can only serve to undermine confidence in the complaints process, forcing those with grievances into the courts. Such a course of action is not in the interest of any of the stakeholders.”
The broker attracted adverse criticism for continually writing glowing reports about its largest client and former owner Bank of Ireland
Bank of Ireland
The Bank of Ireland is a commercial bank operation in Ireland, which is one of the 'Big Four' in both parts of the island.Historically the premier banking organisation in Ireland, the Bank occupies a unique position in Irish banking history...
by always setting price targets about the current market price. In February 2008 with the price at €9.59 it wrote "A low risk balance sheet and cheap valuation provide a safe place to hide...This is a low risk bank." 13 months later the price was at €0.12.
Davy invested on behalf of its clients €411 million to purchase the Irish Glass Bottle Site, in Ringsend
Ringsend
Ringsend is a southside inner suburb of Dublin, the capital of Ireland. It is located on the south bank of the River Liffey, about two kilometres east of the city centre, and is the southern terminus of the East Link Toll Bridge....
, Dublin, in 2006, wrote off €452.8 million in its 2008 financial year. The 25-acre site, which is the company’s sole asset, was given a valuation of €50 million in the accounts.
Enfield Credit Union agreed to accept a €35 million offer from Davy to credit unions affected by the sale of investment bonds to settle its claim against the stockbroking firm that it claimed Davy mis-sold to them. The terms secured by Enfield’s advisers also applied to all the credit unions who are nursing losses of about €75 million on the €183 million worth of bonds Davy sold to them. Around 100 credit unions suffered a second round of losses because the bond that Davy acquired to compensate them for the earlier losses itself crashed in value.
Hundreds of clients of Davy, including former Anglo Irish Bank
Anglo Irish Bank
Anglo Irish Bank was a bank based in Ireland with its headquarters in Dublin from 1964 to 2011. It went into wind-down mode after nationalisation in 2009....
chairman Sean FitzPatrick
Sean FitzPatrick
Seán FitzPatrick was chairman of Anglo Irish Bank until he resigned in December 2008 amid mounting revelations over hidden loans...
. built up a 15pc stake in the American educational publisher, EMPG
EMPG
Education Media and Publishing Group, more commonly known as EMPG, is a holding company registered in the Cayman Islands with no operating subsidiaries. It also has a minority interest in an affiliate that focuses on markets outside the USA called EMPGI...
, as they participated in two equity-raisings—totalling more than $400m. The investors lost all of their money and the broker wrote to its clients apologising for not communicating more about their losses.
In 2010 the Central Bank of Ireland forced the broker to inform the effected clients of two adverse findings against them as an instrument sold "was not compliant with the Trustees (Authorised Investments) Order at the time of its sale as it was not listed on a recognised Stock Exchange’’ and ‘‘Davy had dealt as principal in the purchase and sale of the bond and was in breach of the rules of the Irish Stock Exchange
Irish Stock Exchange
-History:The Irish Stock Exchange is Ireland's only stock exchange and has been in existence since 1793. It is an Irish private company limited by guarantee. It was first recognised by legislation in 1799 when the Irish Parliament passed the Stock Exchange Act...
by not disclosing this fact on its contract note’’ to the investors. The effected parties, who lost many millions, were said to be reviewing their legal options.