The man fronting aggrieved investors in the failed La Vallette Property fund yesterday claimed the financial watchdog had made a U-turn to the detriment of investors and demanded its director general Andre Camilleri resign.
He doesn’t understand what experienced investor means, let alone actually being one
Finco Group managing director Paul Bonello returned to the warpath yesterday with a press conference in which he severely criticised the latest development announced, by the Malta Financial Services Authority through which a quarter of investors who claimed to have been wrongly sold the financial product by the Bank of Valletta were said to be “inexperienced investors”.
The decision concerns 2,258 investors who were reviewed by international audit firm Mazars to establish if they had the experience to buy into the complex property fund.
The financial watchdog had declared that inexperienced investors should be given full compensation irrespective of whether they had accepted Bank of Valletta’s May 2011 settlement offer of 75 cents per share.
On Tuesday the financial watchdog announced 569 investors fell in this category.
Mr Bonello said that “so few” investors were determined to be inexperienced because of the vague criteria given to them by the MFSA.
He made clear that he was not criticising Mazars, which, he said, had done a very good job in many instances, in spite of the parameters laid by the MFSA.
However, he pointed out that many clients had fallen through the cracks of this review and used as an example that of an illiterate stone mason from Zebbug.
“He doesn’t even understand what experienced investor means, let alone actually being one,” Mr Bonello said.
Mr Bonello pointed out that the audit firm was instructed to deem as experienced anyone who had an investment of $50,000 before buying into the La Vallette Property fund.
“What happens to people who inherited bonds or shares? Does the fact that they have inherited this investment suddenly make them experienced investors?” he asked rhetorically.
Moreover, he said, these parameters represent a U-turn on the authority’s previous position. He submitted to the press documents in which the MFSA used no such “arbitrary” $50,000 threshold to establish whether an investor was experienced.
Mr Bonello also criticised the fact that the MFSA had not communicated its decision directly to aggrieved investors but instead informed BOV.
He demanded that the MFSA give investors whose request was not accepted the full reasons in writing, as it was duty bound to do.
The press conference came on the same day that Bank of Valletta issued a statement announcing that it had made “ex-gratia payments” to the investors identified by Mazars as inexperienced.
The bank also said that it had engaged an international firm to review its procedures to learn from the experience and the process resulted in procedural changes, considerable staff training, and also organisational changes, such as the opening of investment centres which offer customers expert advice “in a more discreet and professional environment,” BOV’s chief executive officer Charles Borg said.
The MFSA was contacted by The Times for a reaction but a response was not forthcoming by the time of going to print.