Elderly couple claim investment company's 'gross negligence' cost them €12,000

A 60-year-old man and his wife have filed a judicial protest against beleaguered investment company All Invest and its director, Wallace Falzon, claiming that the company's negligence and greed in investing their money in high-risk bonds had cost them €12,000.

Acting on the advice of AllInvest, Raymond and Maria Vidal, had invested a total of €42,000 in two subordinated bonds - bonds that rank lower than other debts – through the company, without being informed that the bonds were classified as “high-risk.”

The couple managed to recoup €30,000 from the sale of one of the bonds, however their investment in SNS Bank was lost when the Dutch government expropriated all the bank's subordinated bonds to pay for a bail out of the bank. Regular bonds were not affected by the bail out.

The protest filed in the First Hall of the Civil Court this morning accuses the company of being grossly negligent, attributing the financial losses to All Invest's failure to observe regulations and to carry out due diligence. The company's greed had led them to “completely abandon the guiding principles of investment services: honesty, professionalism and upholding the interest of the client.”

The company had never given the plaintiffs a copy of all the documents they had signed, they said. It was only when the investors took All Invest to court that it began to give them out.

The plaintiffs claim that they then noticed that some of the documents contained their signatures, but that these had been obtained dishonestly or through misdirection. Additionally, the complainants do not understand English, much less the technical investment jargon used in the contracts, argued their lawyer, Stefano Filletti.

The protest urges the company to compensate the investors for the damages suffered, or face legal action.

Wallace Falzon, a director of All Invest, is facing a string of claims from several of its customers, which according to an MFSA estimate, “could run into the millions”.

Last October, the Constitutional Court dismissed Falzon's claim that a Malta Financial Services Authority directive to delay the liquidation of his company before it settled all its dues with clients was in breach of his fundamental human rights.

The MFSA’s directive had instructed All Invest to delay liquidation “until the transfer of clients’ holdings is completed in an orderly manner” and until any pending complaints or court proceedings are determined, and until the MFSA was satisfied that arrangements were in place for a proper safeguard of the company.