Investment firm MFSP Financial Management is seeking to start afresh with a rebranding exercise even as a number of investors persist in their fight to be compensated.
MFSP, since re-named Zenith Finance, was earlier this year ordered by the Financial Arbiter to pay out over €100,000 in compensation for investment mis-selling and for not acting in the best interests of clients.
A source with knowledge of the firm’s operations said a “substantial” list of former Zenith Finance clients were still seeking compensation both before the Financial Arbiter and in the civil court.
In one case decided this year, the Financial Arbiter found MFSP mis-sold a €10,000 investment to a student in her 20s, who was a part-time McDonald’s employee with an income of less than €10,000 a year.
The Financial Arbiter said it was clear the complainant did not have the necessary experience and knowledge to invest in the failed LM Managed Performance Fund. Such an investment should never have been promoted and sold to her, the arbiter said.
In another case, MFSP was made to pay €30,900 for failing to act in the best interest of a client who lost all his money following the collapse of the Eurus Safe fund.
A similar compensation claim for another client who lost €15,625 in the Eurus Safe fund was also upheld. MFSP was again found not to have acted in the client’s best interest.
One complainant was found to have signed investment documents that had not been properly explained to her. The client lost £50,000 (€56,000) in the failed LM Managed Performance Fund.
MFSP was ordered to pay back the amount lost.
The firm was fined €12,000 by the Malta Financial Services Authority in 2012 and had its licence to sell complex products restricted for three years over its sale practices. The following year, MFSP’s executive director, Matthew Pace, was appointed by the government to the Planning Authority’s planning board.
Mr Pace had not responded to a request for comment by the time of writing.
Zenith Finance’s executive director handled the “investment” portfolio of the Prime Minister’s chief of staff, Keith Schembri. A sum of $700,000 was held in “investments” by Mr Schembri through an offshore company based in the British Virgin Islands.
Prime Minister Joseph Muscat would not say whether Mr Schembri had been investigated and fined by the Tax Compliance Unit over these investments.
“This question has already been answered,” he said.
Mr Schembri’s ownership of the BVI company used for these “investments” were hidden behind nominees.
A similar investment set up at MFSP was used by Nexia BT’s managing partner, Brian Tonna, and former Allied Newspapers managing director, Adrian Hillman.
The Financial Intelligence Analysis Unit in June fined MFSP €38,750 for failures in its anti-money laundering controls.
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