Maltese Cross lost almost €7 million in illegal transactions

The financial services company Maltese Cross has been found to have a material shortfall of some €7 million in assets, an investigation by the Malta Financial Services Authority has found.

In a letter to clients who have lost their savings, the MFSA said the shortfall appears to have resulted from an allegedly bad use and manipulation of clients’ assets, including through unauthorised transactions.

“As a consequence, a significant amount of the assets belonging to clients, have been lost,” the MFSA said.

According to the investigation, clients’ assets were deviated into other investments in a bid to recoup losses that Maltese Cross Financial Services suffered on other investments.

The MFSA said that Maltese Cross was selling off clients’ investments and deviating the funds elsewhere, without clients’ consent, to be invested in other financial products in a bid to recoup losses suffered on other instruments.

The company also was advising clients to invest in particular financial instruments, but the clients’ money would not be used to invest in that instrument recommended, but used in other investments.

Almost €7 million were invested by Maltese Cross on a nominee basis, with clients’ holdings drastically reduced to just €440,000.

The MFSA is now investigating whether the investments held directly in the name of clients were also manipulated by the firm, and if filing for bankruptcy would safeguard investors’ interests.