The Morrogh working group report into the fall out from the W&R Morrrogh Stockbrokers failure has been published today by the Department of Finance.
The report makes a number of recommendations including an amendment to Section 52 of the Stock Exchange Act. This is to provide clarity that client assets controlled by third party intermediaries can not be accessed by a receiver in the event of the failure of a company.
Minister for Finance Brian Cowen, said the report will improve investor compensation and the management of liquidations or receiverships in the event of investment firm futures.
The Cork firm went bust in 2001 with liabilities estimated at €12 million after Stephen Pearson lost millions trading in financial futures.
Mr Cowen said he would like to acknowledge the contribution made by industry and public sector representatives to the complex issues considered by the group.
According to the authors of the report, investor compensation after the failure of an investment firm should be met by industry and a cap should be placed on top-up funding during any one year.