MFSA concluding pending property fund investigations

The financial regulator has arrived at the conclusion of two investigations on the La Valette multi-manager property fund, and is now at a stage where all involved parties will be asked to submit representations to the Malta Financial Services Authority.

The investigations revolve around whether the fund was sold to investors who were not eligible, and the allegation that fund directors and Bank of Valletta staff divested their holdings when they saw that the fund was not performing well, having had information which was not in the public domain.

The MFSA has already fined Bank of Valletta and its subsidiary Valletta Fund Management a total of €347,816 for regulatory breaches of the fund’s investment restrictions.

The MFSA said that should it determine that BOV or VFM, or any other person, has contravened any provision of law or of any regulations, it will impose appropriate administrative sanctions, and publish a statement to that effect.

“Until the publication of such a statement, all proceedings are subject to strict rules of confidentiality,” the MFSA said.

The authority said it will resist pressure to set an unrealistic deadline to complete its pending investigations and that it would will fulfil its duties “painstakingly and responsibly”.

The authority added that it was not a court of law that cannot arbitrate in disputes between the bank and investors: in fact, the MFSA’s recommendations do not bind either the financial entity or the complainant.

“Consequently, there may be cases where a licence holder or the consumer, or both, may choose not to accept the MFSA’s recommendations,” the MFSA said.

The authority’s Consumers Complaints Manager will inform a complainant whether a case is closed or not, and will recommend that the consumer seek independent professional advice, if they are not satisfied with the outcome of the complaint.

“In all cases, however, an investor’s right to obtain compensation through the legal/judicial process remains unimpaired,” the authority said.