Bank of Valletta clients want to intervene in the appeal filed by the bank with the financial services regulator’s tribunal over an administrative fine it incurred last year after it breached investment regulations.

The Malta Financial Services Authority fined BOV €175,174 in December after it found the bank breached regulations when it sold highly complex securities, including those of Lehman Brothers, RBS, Lloyds and Erste Bank, without sufficiently informing clients of the risks associated with the investments. As a result, clients did not have enough information to make an informed decision.

The bank also failed to obtain and record the personal and financial information necessary to make appropriate recommendations.

According to Paul Bonello, director at financial services company Finco, who has been leading aggrieved BOV investors on a number of issues, 55 elderly clients filed an application to intervene in the appeal proceedings. He said the majority of the 55 applicants were over 60 years with a number of them in their 70s and 80s. One is 97.

The applicants claim the bank failed to inform them and explain the legal and financial nature, characteristics and risks of the investments, which were put across as bonds when they consisted of “deeply subordinated, irrdeemable, non-voting, non-cumulative, non-participating preference shares”.

As a result, the investors lost money when the relevant companies went bust or suffered big losses in 2008 and 2009. The applicants complained with the MFSA that the bank mis-sold the product.

Mr Bonello said many were still being investigated by the authority but a good number of applicants had their complaint determined by the MFSA, which found in their favour.

Ian Refalo signed the application.

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