Court action should only be sought as a last resort and all possible avenues to achieve restitution, including an insistence that Bank of Valletta shoulder its responsibilities towards investors, should first be exhausted, the Malta Financial Services Authority said today.
In a statement which followed a call by Finco director yesterday for the authority to take the bank to court, the MFSA said that due in great part to more than 20 pending court cases, depositors of BICAL, which suspended its operations in 1973, were still waiting for the last 20 per cent of the capital deposited with that bank.
“There is, therefore, no guarantee that action through the courts against BOV will result in quick payments to aggrieved investors.
“The MFSA has never shirked its responsibilities at law, and will not hold back from using all its regulatory and supervisory powers, at the appropriate time, and not before it has explored all other available avenues,” it said.
The authority noted that investors in the La Valette Multi Manager Property Fund and in other securities, such as perpetual or hybrid securities, suffered as a result of misselling and other breaches of licence conditions by BOV and the bank and its subsidiaries had already been fined more than €700,000, for these breaches.
The authority had also engaged a professional services firm, at the expense of BOV, to carry out an independent review of each investment in the La Valette fund.
“The file review which is currently being undertaken will result in a list of investors who should be paid compensation.
“The authority has required BOV to pay further compensation to those investors, as well as others regarding whom an agreement to pay compensation has already been reached between the authority and the bank.”
In relation to investments in Lehman and other hybrid and perpetual securities, the authority had recommended that the bank compensate aggrieved investors.
The bank reached a settlement with a number of those investors but, in many other cases, it was disagreeing with the authority’s findings and recommendations, and refusing to offer adequate compensation.
“The MFSA findings and sanction in this area have been appealed by the bank and the judicial process is taking its course.”