THE DEPARTMENT of Finance has rejected suggestions from Sinn Féin’s Pearse Doherty that its new secretary general, John Moran, was associated with improper trading practices that led to a censure from the US Securities and Exchange Commission (SEC).
Mr Doherty was expelled from the Dáil chamber yesterday when he persisted with his claims during the Order of Business. He said there had been much talk about legislation dealing with the issues of fitness and probity in the banks.
“The secretary general of the Department of Finance was CEO of Zurich Capital Markets, which during 2007 was censured by the US Securities and Exchange Commission and fined $16.8 million for aiding and abetting four hedge funds in defrauding mutual funds.”
He asked the Tánaiste, Eamon Gilmore, when legislation would be enacted to allow appointments to senior positions in the Civil Service to be scrutinised by the Oireachtas.
Addressing Sinn Féin, Mr Gilmore responded: “They have only changed from real assassinations to character assassinations.”
A spokesman for the Department of Finance said Mr Moran was not involved in the controversial dealings and that no such suggestion had ever been made by the SEC.
“The events cited took place between 1999-2003, before Mr Moran arrived in the New York office,” the spokesman said. “Indeed, Mr Moran was tasked with dealing with and resolving the issue. It is worth noting also that no suggestion was ever made by the SEC of any involvement by Mr Moran in the activities that led to the censure.”
Mr Moran was a founding employee and a chief executive (1997 to 2005) of Zurich Capital Markets, a subsidiary of the Swiss financial services group Zurich Financial Services. The company, which he left in 2005, had offices in Dublin, Sydney, London and New York.
From 1999 to 2003 ZCM gave money to hedge funds that were involved in market timing, a prohibited form of investment in mutual funds. In 2007 the SEC found that it had “aided and abetted four hedge funds that were carrying out schemes to defraud mutual funds that prohibited market timing.”
The company earned $11 million in revenue from this activity. However, the SEC fined it $16.8 million for its involvement.
Mr Moran moved to Sydney in 2002 to manage the wind-down of ZCM Asia. In 2003 he became CEO of ZC, his CV says, to manage the sale of the lending and asset management assets of that division.
