Financial regulator suspends All Invest’s investment services licence

MFSA says All Invest failed to act in the best interest of investors as required of all firms which provide investment services.

8 June 2013, 12:00am
by Matthew Vella

2 min read

All Invest sold complex financial products to retail investors who were not suitable for such products.

The Malta Financial Services Authority has suspended the investment services licence of All Invest Co. Ltd. after identifying a series of regulatory breaches.

All Invest will not be able to accept new business and must now begin an orderly transfer of its clients business.

The MFSA investigated the manner in which All Invest had sold complex investment products to retail investors. "In a number of instances, All Invest failed to act in the best interest of investors as required of all firms which provide investment services. The Authority's decision was based on a detailed review of a number of investor files held at All Invest, as well as information provided by the firm itself," the MFSA said.

The regulator said that in certain instances, investors received unsuitable advice. "In such instances, All Invest also failed to establish the investor's risk attitude and investment objective, which were in conflict with those of the financial products sold.

"There were also instances where All Invest failed to establish if the investors possessed the relevant knowledge and experience to understand the risks involved in relation to the products sold. These criteria were meant to be established at the onset of investment advice and by means of a suitability test."

The MFSA also said that All Invest should not have promoted and sold complex investment products, and a proper appropriateness test was not compiled. The firm failed to establish if such non-advisory clients possessed the relevant knowledge and was said to have failed experience to understand the risks involved in relation to the products sold.

All Invest was required to maintain sufficient records to be able to demonstrate compliance with the regulations and with the conditions of its investment services licence at all times. But in a number of instances, it failed to obtain the required information at the time when the transaction took place.

Back in April, All Invest had contacted some of its clients and asked them to transfer their holdings to another licensed firm, without written consent of the MFSA.

On 17 April 2013, the authority instructed All Invest to suspend, with immediate effect, the process of transferring clients' holdings, including contacting its clients, until further instructions were received from the regulator. The MFSA however said that its instructios were not followed by All Invest director Wallace Falzon.

On 3 May, the MFSA issued a directive to the company directing it to immediately suspend the transfer of the clients' holdings to other licensed firms.

Matthew Vella, a freelance journalist at MaltaToday, was formerly executive editor at Malt...

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TO ALL THOSE PEOPLE THAT WANT TO INVEST IN ANY TYPE OF INVESTMENT FUNDS OR SIMILAR INVESTMENTS YOU SHOULD ALWAYS TAKE ADVISE FROM A LAWYER WHO WILL SURELY TELL YOU THAT THERE IS A HIGH RISK IN THESE INVESTMENTS. YOU SHOULD READ THE CONTENTS OF THE DOCUMENTS PROPERLY AND UNDERSTAND FULLY WHAT THE RISKS ARE. THERE IS NO NEED TO STAY BANGING YOUR HEAD AGAINST THE WALL AFTER YOU HAVE LOST MOST OF YOUR MONEY BECAUSE EVERY TYPE OF FUND OR INVESTMENT IS TIED UP WITH REGULATIONS AND ALL STATE IN THEIR PORTFOLIO THAT THEY GIVE NO GARUANTEES ON ANY PROFITS ON ANY INVESTMENTS 'YOU MAY GAIN OR LOOSE' SO THINK WHO IS TO BLAME YOU OR THE PEOPLE THAT PERSUADED YOU TO INVEST?

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If you want support on the damage caused by the expropriation of SNS Bonds by the Dutch Government and/or violation of 'Duty of Care'-aspects by your financial advisor (intermediate or bank) you can register with our foundation (www.sos-ns.com). I have been in Malta a few weeks ago and we have had our first bondholders meeting. I am now studying the files that 37 Maltese invewsto0rs have send me. They have bought their bonds mainly through All Invest and HSBC. We wil organize a second bondholders meeting after the verdict of the Enterprise Chamber on the possibillities of compensation has been published. You can contact me directly on 00 31 492 763600

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"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and it's issuance." -- James Madison

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@luckystrike you asked what my point is, well here it is a good example:- The regulator fined BOV the maximum fine of €203,150 for breaching license conditions when selling the La Valette property fund to retail clients. http://www.maltatoday.com.mt/en/businessdetails/business/businessnews/Bank-of-Valletta-fined-203-000-by-MFSA-over-mis-selling-of-property-fund-20120604 Theft by Deceit = is Crookery!

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@ vigilanti. Your comments make a lot of sense. I ask luckystrike, do you remember on 23.1.2013 a leading stock broker told Andre Camilleri, director general at MFSA to resign over the Property Fund. And I ask the same question to tell him to resign about the Div Multi Manager Fund. MFSA employees are paid to see that the normal small investor is not robbed. MFSA always open their mouth when its to late, they should wake up. Tal misthija every euro invested in this Fund through the unexperienced staff at BOV who sell these gimmicks in 2007, its now worth .64c. I pretend that these people are paid in order to help people invest in the proper channels. They should follow up what is going on, and if they see that there is something fishy, they should take action immediately. It is daylight robbery. Sur luckystrike if you put 1000 euro under the mattress, after a while at least you still find the 1000euro. But in this case this fund was and still is rubbish, you put 1000 euro in 2007 and find 634euro in 2013, 6 years later. And to add insult to the investors, at the end of the year the Bank issue a statement saying it made 80 million profit

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HAS THE MOTHER COMPANY IN SPAIN GONE BUST BEFORE ALLVEST WAS INVESTIGATED FOR OVER BLOWING ITS FINANCIAL INVESTMENTS AS TO PERSUADE THE MALTESE TO INVEST? ALL THE PEOPLE IN MALTA THAT INVESTED IN THIS COMPANY SHOULD ALL GET TOGETHER AND SEEK THE HELP OF AN INTERNATIONAL LAWYER BECAUSE i CAN ASSURE THEM THAT UNDER EUROPEON LAWS THEY HAVE THE RIGHT TO LEGALY TAKE EVEN THE MOTHER COMPANY TO COURT FOR WRONGFULLY ADVISING PEOPLE TO INVEST IN ALL VEST. MFSA HAS THE DUTY TO INVESTIGATE THE WRONG DOINGS OF THE PEOPLE INVOLVED IN ALL VEST AND BRING THEM TO JUSTICE,FOR MFSA TO HAVE SHUT THEM DOWN I CAN ASSURE YOU ALL THAT THERE IS MUCH MORE TO THIS THAN THE EYE CAN READ.

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@luckystrike Its not only when you “put your money under the mattress” that “you are exposed to thieves”. Because then there are the more ‘sophisticated thieves’ who will call you at home, kindly informing you that a fixed deposit you have is about mature and that they have this wonderful product that they want to talk to you about. You are then presented with a lot of Broad Smiles, Warm Welcomes and those Sunny Glossy Brochures telling you as in the case of the Vilhena Diversified Multi Manager how wonderful it is but never mentioning the ‘side effects’. That is deceit. They were selling the VFM Funds using the same techniques as used by sellers of Tupperware! So yes, Crooks present themselves in many formats! And MFSA is supposed to be helping out in such cases. Also let us not forget that the Malta Government is the Main shareholder of BOV, so the Government is responsible for these Scams as well!

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@vigilanti ' Imaging putting in say 10,000 Euros and ending up with 6,400 Euros in 5 to 6 year' your point being!!? When you invest you take risks. Ending up with 6,400 is not so bad - when you invest in shares you could end up with zero if they go bust. Those funds are usually a basked of equities or bonds and they come with risk. If you don't want risk, put your money under the mattress if you think that will be safe. (in reality it won't because 1) inflation will eat away at it 2) you are exposed to thieves)

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MFSA should issue an urgent message to the general public that it is investigating all investment services thus assuring that all investors in other services are now ok after the All Invest suspension as the air is still not clear and obviously seeing all this lack of accountability in these areas leaves much to be desired.

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I agree 100% with vigilanti. I wrote several times and even to the ex chairman of BOV about this rubbish account. For every euro invested in 2007 instead of making one cent profit, we lost 36%. It is worst then the Property Fund, cause at least they were offered 75cents. I spoke to MFSA about it as well but got no where. I suggest to all those who have invested in this fund to voice their concern. If needed we take action as well like other investors. That was daylight robbery. When I spoke to a foreign Manager who came to Malta to address the AGM he said he knew about it cause the managers who were there before had slept, and most probably are still asleep.

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The owners and managers of this firm, All Invest should be named. Otherwise what is there to stop them from registering a new company and start trading all over again with the public not realising that these are the same people who failed?

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MFSA should also investigate BOV’s: Vilhena Diversified Multi Manager Income Fund; and Vilhena Dynamic Multi-Manager Fund, which are rubbish Funds sold to customers by “Inexperienced Officers”. Or , were the Officers TRAINED to use those entrapping techniques on unsuspecting Clients? With the BOV Vilhena Diversified Multi Manager Income Fund CLIENTS HAVE LOST OVER 36% of the money they had initially put in that Fund! Imaging putting in say 10,000 Euros and ending up with 6,400 Euros in 5 to 6 years. Now they are trying to MERGE those 2 FUNDS into another New Fund. That way, they avoid attracting Public attention of these FAILED FUNDS. Who does not remember the disastrous BOV Property Fund. MFSA should wake up to these Elaborate and Sophisticated Scams and do something for the tangible!