A number of investors yesterday accused Bank of Valletta of encouraging a blind, hard of hearing, inexperienced 95-year-old man to invest in a fund despite it being intended for knowledgeable investors.
The accusation was made in a judicial protest filed against the bank by 32 investors who join a group of 227 all claiming their money was invested in mismanaged funds by BOV.
This latest protest is the fifth following those filed on August 4 and October 6 by Finco Treasury Management on behalf of 72 investors and on August 17 and September 16 by another 155 investors.
The latest protest was filed against the bank and La Valette Multi-Manager Property Fund, managed by Valletta Fund Management, a joint venture between BOV and Insight Investment of London.
Investors noted the Malta Financial Services Authority said in its Consumer Complaints Unit Annual Report for 2009 that the property funds were for experienced investors. However, the bank continued to sell shares in the fund to people who were clearly not, making them sign a document saying they were.
In this latest protest, the investors repeated the points already raised in the fourth other protest, adding the specific case of the 95-year-old man who, they said, did not know the difference between a share and a bond and who was made to sign a document stating he was an experienced investor when he clearly was not.
They also mentioned the case of a 73-year-old man who was encouraged by the fund managers to redeem his investments in government bonds and divert the money in the property fund.
In the previous protests, the investors focused on the investment of their capital in nine underlying funds which, they claim, were inappropriate vehicles for their investment. In fact, they lost a substantial amount of money due to such mismanagement of the funds, they said.
The bank is defending itself on grounds that there was no wrongdoing on its part and that the fund had simply fallen victim to the international financial crisis.
The protest was signed by lawyer Ian Refalo.