MFSA must publish La Valette mis-selling report - Labour

The Labour party has urged the Malta Financial Services Authority to publish its final investigation into the three-part inquiry it has been carrying in the management of the La Valette Sicav's multi-manager property fund, which lost over €50 million in investors' savings.

The MFSA has yet to publish findings of whether the Sicav, which is owned by Bank of Valletta's investment arm Valletta Fund Management, sold the property fund to retail clients which should have been 'experienced investors' as termed by the law.

The bank has insisted that all clients signed the consent forms acknowledging they were so called 'experienced investors'.

Labour MP Charles Mangion said the PL was disappointed that the mis-selling investigation remains unpublished by the regulator. "Hundreds of investors and families are anxiously waiting for the MFSA to confirm whether their complaints are justified or not, and whether they were ineligible to be sold this instrument in the first place."

The MFSA had announced back in August 2011 that it had arrived at its conclusions on the mis-selling, and again in November said the report would be out by the end of the year.

"Two years since the first complaints, Labour deems there was enough time for the MFSA to publish its findings and satisfy the public's legitimate expectations," Mangion said.

"It is unacceptable that the MFSA leaves so many investors hanging, especially pensioners and other financially vulnerable clients."

Mangion also pointed out that the property fund remains open for public subscription, with a prospectus that has not yet been updated since the MFSA first fined Bank of Valletta and Valletta Fund Management.

Bank of Valletta was fined an administrative penalty of some €350,000 for breach of investment services rules over the administration of the La Valette multi-manager property fund.

In June 2011, the bank offered investors a conditional compensation offer of 75c per share after a series of judicial protests were filed against the bank in the name of the property fund investors, who were in the main represented by stockbrokers Finco Treasury Management. 

A total of 2,021 out of 2,075 investors - 97.4% - accepted the offer, with BOV issuing payments of €44.1 million for 60.3 million shares held in the fund.

In a second investigation by the MFSA, the regulator issued a sanction against former La Valette director John C. Ripard, reprimanding him for disposing of his holdings in the property fund whilst in possession of sensitive information which was not available to the public and which he became privy to in his capacity as a director of the Sicav.

In an unrelated action, the MFSA also issued sanctions against the bank on its sale of Lehman and RBS instruments.