Shane Ross (Dublin South, Independent)
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To ask the Minister for Finance if the State has ruled out compensating investors who have lost savings and pension contributions in the Customs House Capital debacle; if the State acknowledges a responsibility in this affair due to lack of adequate regulation by the Central Bank of Ireland; if it is open to any citizen to take an action against the Central Bank for negligence under any circumstances; if there is a ceiling on the compensation available to investors in this case; the number of investors that were affected; and if he will make a statement on the matter. [38426/12]

Michael Noonan (Limerick City, Fine Gael)
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The compensation of investors is provided for in the Investor Compensation Act, 1998 and the investor compensation scheme is operated by the Investor Compensation Company Limited. The scheme is intended to help retail clients and does not cover institutions or professional clients. The Official Liquidator of Custom House Capital Limited is currently reconciling all client investments held through Custom House Capital Limited. This will be a lengthy and complex process. Until this reconciliation process is fully completed it will not be possible to quantify the extent of losses for each individual client. The Investor Compensation Company Limited (ICCL) operates the scheme that pays compensation where an authorised firm is unable due to financial circumstances to return money or investment instruments owed to a client. Investors will be compensated if they are eligible investors only. The limits to the amounts payable in compensation is 90% of the amount lost, subject to a maximum of 20,000 euro, to each eligible investor.

Custom House Capital Limited has approximately 1,500 clients, the majority of whom are resident in the State. Until the reconciliation process currently underway by the Official Liquidator is complete, it will not be possible to determine the number of investors affected. The Central Bank has advised that in July 2011, it received new information, previously unknown, which increased the Central Bank's concerns regarding the integrity of client investments managed by Custom House Capital Limited. The Central Bank then decided to impose further directions on the firm and in July 2011 to seek the appointment of High Court Inspectors to investigate the affairs of the firm.

No amount of skilled supervision or enhanced audit can absolutely guarantee that determined and deliberately concealed efforts to misuse client holdings can be prevented. Section 33AJ (2) of the Central Bank Act 1942 provides that the Central Bank can not be held liable for damages "for anything done or omitted in the performance or purported performance or exercise of any of its functions or powers, unless it is proved that the act or omission was in bad faith".