Bloxham Stockbrokers Gone

Where will Alan McQuaid end up? Savills? Sherry Fitz?


Irish Housing Market Turning? Bloxham stockbrokers
March 2008

Bloxham Stockbrokers predict 7-10% house price rise in 2010:
January 2010

Makes sense. Don’t brokers keep money on account with each other? I wonder was it a bit of a panto moment:

Bloxham: “…aaaand of course we have €50m on deposit with you.”
Davy: “Oh no you don’t!”

Bloxhams auditors were Deloitte. The chap who was let go came from straight from Deloitte. The other partners say they knew nothing, this sounds a bit fishy. … king3.html

Surely that should be well-known in wealth destruction circles.

Well that’s Davy’s fucked then. Wait for pronouncements about property increases and loads of dodgy funds whose value drops by 97%.

Bloxham’s problems started with trades made in 2007 - Thomas Molloy → … 23694.html

So, proprietary trading discovered during the DD. they bet the house on the property market and lost. At least they were eating their own dog food.

So, do we buy that the junior partner was off buying bucketloads of shares on his own bailiwick and then managed to keep the losses hidden for five years? This is the narrative they want us to believe, but does it pass the smell test?

absolutely not.

If the directors or employees were trading on their own book, it should have been reported to the CB as they require a portion of connected party positions to be held in regulatory capital, precisely to prevent situations like this.
So, the partner must have concealed the prop positions, thus under reporting exposure positions and reducing the amount of reg cap they needed. The other directors/partners may try to deny they knew anything about this as they can say, “sure, we thought he disclosed everything”, but the onus is on each director to ensure their own positions are reported, so, they all will burn.

I look forward to a good explanation of all the Deloitte links in the weekend papers.

In my opinion the best case scenario would be that maybe some of the other directors were unaware of the issue which may imply incompetence on their parts.
A much more likely scenario in my opinion is that the financial partner is either the “patsy” or will be looked after for their trouble.

[just a little snip]

I like the way the indo makes it sound like some clever trading strategy gone wrong rather than a simple punt gone wrong.

Deloittes are mentioned as the auditors in the papers and above. As a partnership, whatever the regulatory requirements, partnerships are not subject to audit in preparing their financial statements.

I can’t understand why a firm these days would remain as a partnership rather than through a ltd co. Given the joint and several liability of the partners, they can blame the financial partner all they want, they are still on the hook and just as conflicted noted, makes them seem grossly incompetent.

I certainly wouldnt take advice from Pramit if his attitude to his personal risk is as dumb as this.

This is a peculiarly worded sentence. If the trades were legitimate, why were the losses on them covered up?
Where did the margin come from? Why was it not called?
Or were they bought with the company capital? In which case, why did the other partners not know where their company capital was?

Edit: crossed with grumpy…

Edit2: I wonder can these trades be correlated with any advice Bloxhams were giving re: these companies during the period; did they have AIB/CRH et al. rated a buy?

Not really my area but if they were acting as a market maker of sorts it’s inevitable they would be carrying some trades. However market makers should balance their books by Offloading/hedging (across index or industry. -I’m long some BoI might as well sell me some AIB etc)
This is fine as long as its controlled, recognised, reported and capital is held.

I’m guessing incompetent control lead to one thing and then another…

When the markets were ticketboo it was fine but then the tide went out.

Bloxhams to my knowledge had their own prop desk, my understanding from the article is that the desk waded into Anglo etc when they tanked (it sais positions were taken in 2007) in the belief (and in fairness their researchers were predicting celtic tiger II at the time) that the crash was a blip. I imagine whatever way they were betting on them, it allowed them to hold the bet, i.e. not crystalise the loss and wait for the value to recover. Not sure what sort of instrument would allow you to do that without margin calls etc that would require cash but either way I suspect this is the tip of the iceberg in so far as the CB moved literally overnight. Not surprising they were trying to talk up the market for so long!!!

My understanding is that it is a criminal offence (in many jurisdictions) for analysts to “talk up” positions that their trading desks are holding (in collusion with the trading desk). So far, there’s no evidence of that at Bloxhams…

Covered off by disclosure at the bottom of the “research” reports.

Tongue in cheek remark, not suggesting any market manipulation going on, in any event no one else in the firm knew what was going on other than finance man…

Of course, correlation does not imply causation… even where it’s bleedin’ obvious there is something that might be investigable…