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Investors ask tribunal to intervene in Bank of Valletta’s appeal against sanctions
Investors apply to Malta Financial Services Tribunal to intervene in Bank of Valletta’s appeal against MFSA’s administrative sanctions on perpetual securities.
12 April 2012, 12:00am
Matthew Vella
Matthew Vella
2 min read
The applicants are requesting to intervene in the appeal against an MFSA decision on the sale of perpetual preferred securities from Lehman Bros, RBS, Lloyds, Erste and others.
Fifty-five Bank of Valletta clients have submitted an application to the Malta Financial Services Tribunal to request the Tribunal to intervene in Bank of Valletta appeal against the MFSA administrative sanctions, that fined the bank €175,174 in December 2011.
The penalty was the culmination of a lengthy investigation triggered off by a number of complaints on the manner in which certain securities had been sold to investors, including perpetuals and other preferred securities issued by Lehman Bros, Royal Bank of Scotland, HBOS and others.
The applicants are requesting the Malta Financial Services Tribunal to allow them to intervene in the appeal proceedings of BOV against an MFSA decision related to the sale of perpetual preferred securities from Lehman Bros, RBS, Lloyds, Erste and others.
A decision by the tribunal in January 2012 allowed over 100 complainants to intervene in the bank's appeal against the MFSA's decision relating to the La Valette multi-manager property fund.
In a statement, Finco Treasury Management - which has represented most of the complainants' interests - said that the applicants have a juridical interest in the proceedings.
"If the Tribunal were to decide on the Bank's appeal without hearing the investors this would run against the natural principles of justice as well as the provisions of the Administrative Justice Act."
The applicants claim BOV failed to explain to them the risks of the perpetuals. "The bank put these perpetual securities across to its customers as if they were as straight bonds when in fact they consisted of deeply subordinated, irredeemable, non-voting, non-cumulative, non-participating preference shares," Finco said in the statement.
All applicants submitted a complaint to the MFSA for misselling. Finco said that the MFSA considers compensation should be done by way of "repaying investors the capital originally invested, as well as an equitable rate of interest for those years during which the complainants did not receive the expected income" from the Lehman and RBS perpetuals.
Matthew Vella, a freelance journalist at MaltaToday, was formerly executive editor at Malt...
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When the government is going to do something about the B O V cases, I mean the property fund and the Lehman brothers cases!!!
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BOV has consistently dived south these past 4 years. Their latest bond issue, being barely oversubscribed as opposed to past occurrences, is the latest indicator. One would feel sorry for its shareholders. Why has Government not carried out the necessary managerial and/or Board changes? Some changes have been carried out. But were the right people chosen, or the CHOSEN few were picked?
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Maybe, just maybe, at long last the MFSA wakes up and smells the coffee? Or is it too much to ask, it waking up from its stupor? Does it have to be pushed and prodded by Finco each and every time, to do something about the financial chaos these corporate sharks have thrown the small investors into?
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Maybe, just maybe, at long last the MFSA wakes up and smells the coffee? Or is it too much to ask, it waking up from its stupor? Does it have to be pushed and prodded by Finco each and every time, to do something about the financial chaos these corporate sharks have thrown the small investors into?
