Regulator declines comment on MFSP client review

The Malta Financial Services Authority is declining to comment on claims raised in a judicial protest against the financial services firm MFSP Financial Management, that a review of the firm’s clients had been completed but not yet made public.

In her protest, Veneranda Cassar said that on 31 October, 2012, the MFSA had announced a review of ARM bondholders who were MFSP clients, and that the review should have been completed in three months’ time.

The review would have determined what sort of compensation clients of MFSP could be owed on lost investments.

According to Cassar’s protest, the client review has been “completed, the report submitted to the MFSA, and for some mysterious reason put away in some high official’s drawer, and that since then, [the MFSA] has stopped considering public complaints against MFSP Financial Management. Who is protecting who?” Cassar asked in the protest filed by lawyer Anna Mallia.

Cassar, a widow, and her children filed the protest against MFSP and the financial regulator over losses they incurred after having sought the company’s advice on the purchase and sale of securities, while her husband was still alive.

Cassar said both she and her late husband faced “aggressive sales practices” from MFSP, and that they were “tricked” into signing ‘execute only’ instructions. She said she lost a total of €250,000 in funds they had invested from selling off their bakery.

After her husband’s death, she found out that eight of the 10 investments she had been sold were “complex structured securities”, that she was not receiving any interest from the funds invested, and that now nine of the 10 investments had been suspended.

She first lodged a complaint with the MFSA in February 2012, but then in September 2013 the MFSA said the complaints had been “put on hold”.