MFSA and BOV: how many of 2,250 compensated?

On Monday afternoon, the Malta Financial and Services Authority announced that it will be forwarding to the Bank of Valletta the list of investors to be compensated for the money they lost in the La Valette Multi Manager Property Fund.

But MFSA has not said how many of the 2,250 investors are going to be compensated. A short press release of the MFSA leaves the matter still shrouded in mystery and has plunged the investors into deeper anxiety.

The Mazars exercise is an investigation exercise executed by the MFSA on the complaint of investors. It is not BOV that have carried out the exercise.  For these reasons the investors expect to be informed by the MFSA and not through BOV of the MFSA's investigation results of their complaint and an explanation for every case why it got a positive or negative decision.

Article 19(2) of the MFSA Act provides:

'Where the Authority has investigated any matter under this article, it shall prepare a report on that matter and (subject to any obligation with respect to professional secrecy) shall send a copy of any such report to such of the following persons as it thinks appropriate, that is to say:

(a) any person to whom the report refers or who appears to the Authority to have an interest in the matter to which the report relates;

(b) any person whose functions under any enactment appear to the Authority to be exercisable in relation to that matter;

(c) any person who appears to the Authority to be a person who ought to take account of the report in determining how to act in relation to that matter'.

BOV, which has mis-sold the schemes to investors, should not be the one informing its victims of MFSA's decision. It should be MFSA itself. Having BOV inform its victims lacks transparency. It is also discourteous towards the clients who have legitimate expectations to have the law respected and to be advised by the competent authority that has investigated their complaint and to be given the report with reasons for the decision taken in their respect.

Last summer the MFSA said that where it is established that investors were not eligible to invest in the Fund, the "compensation to be paid will amount to €1 per unit, less any amounts previously received for each unit. The objective is to finalise the review process and pay any further compensation by the end of December 2012".

The 2,250 shareholders in the Property Fund still need to know whether they will be receiving additional compensation. MFSA high officials have confirmed in evidence given in open court that the MFSA started investigations into the said Fund only after clients of Finco started filing judicial protests in July of 2011.

The massive misselling of Bank of Valletta as intermediary salesman of the Fund and as established by the detailed report of the MFSA on 4 June 2012, was also committed against all investors, experienced or not. It is not correct that a regulatory authority such as the MFSA adopts formal arithmetical tests rather than substantive criteria. Indeed, an investor who has transacted US$50,001 may in any case not constitute an experienced investor who, in terms of MFSA Rules, is an investor that has "the expertise, experience and knowledge to be in a position to his own investment decisions and understand the risks involved".

Karin and Raymond

Labour leader Joseph Muscat said on Friday 28 December 2012 that the murders of Karin Grech and Raymond Caruana make them brother and sister. "Both were killed by political intolerance which is largely repudiated by many Maltese and Gozitans. I believe our people have become more tolerant though we still have to do more to have people embrace and celebrate diversity. We will continue to come here every year to commemorate Karin. No family should go through the pain that the Grech and Caruana families had to go through."

Fifteen-year-old Karin was killed 35 years ago when she opened a parcel that was addressed to her father. The parcel exploded and injured her fatally. Her father had come back to Malta to help during a medical strike resisting the introduction of the National Health Service in 1977.

Raymond Caruana was a Maltese Nationalist Party activist, murdered at the Gudja club headquarters on 5 December 1986, at the age of 26. While at the PN club in Gudja, Malta, a car drove past the club, firing several shots, one of which hit Caruana.