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Irish Independent
Irish Independent
Gordon Deegan

Central Bank investigating Goodbody as part of probe into potential market abuse failings

Central Bank Governor Gabriel Makhlouf

Pay to ‘key management personnel’ at Goodbody Stockbrokers last year more than doubled to €8.1m as the business was readied for sale to AIB while the business is now being investigated by the Central Bank, newly filed accounts show.

New accounts for Goodbody Stockbrokers UC show that key managers at Goodbody shared a once off ‘other payments’ of €3.173m in addition to their usual income.

Meanwhile, a note to the 2021 accounts just filed says the firm is being investigated by the Central Bank into alleged contravention of market abuse regulations.

The note states the Central Bank, headed by Governor Gabriel Makhlouf, notified the firm in January of this year of its decision to commence an investigation following a wider industry probe including issuing correspondence to the industry in January 2020 and July 2021 relating to industry wide deficiencies in market conduct risk identification, market abuse trade surveillance systems and market abuse compliance frameworks – essentially the safeguards that need to be in place to detect and deter potentially suspicious trading activities. 

The purpose of the Central Bank investigation at the firm is to gather sufficient information to determine whether a contravention has been committed, the note states.

“The steps taken to date do not involve any conclusion that there has been a breach of the law by the company or its officers”.

“Given the early stage of this process the outcome here is uncertain’, the note concludes.

The accounts show revenues at the stockbroking firm last year increased by 9pc from €72.4m to €79.2m made up of €75.93m from contracts with customers and €3.26m in trading income.

In September 2021, AIB completed the purchase of Goodbody for €138m including the stockbroking and wealth management group’s €56m of surplus cash, in a deal that would protect bonuses for staff of the securities firm.

The group has offices in Dublin, Cork and Galway along with a branch in the UK.

The overall €8.1m pay to key management personnel last year was made up of salaries of €4.4m, ‘other payments’ of €3.17m, pension costs of €201,000 and directors’ fees of €320,000.

The directors state that excluding a €3.6m cost concerning the sale to AIB, Goodbody Stockbrokers UC's underlying pre-tax profits last year increased by 11pc.

The firm’s fee income last year increased by 34.5pc from €32.2m to €43.47m while commission income reduced by 8pc from €25.89m to €23.89m. The business’s ‘other income’ also decreased by 7pc from €9.2m to €8.56m.

The business employed 327.

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