About 50 investors were awarded €300,000 in compensation over the past six months after the financial arbiter found that Bank of Valletta mis-sold them what was understood to be a low-risk investment product.

The La Vallete Fund, launched in 2005, had been suspended three years later and eventually wound up after making losses of €33 million.

This was the second tranche of investors to be awarded significant compensation by the financial arbiter, although, this time, the compensation claims were based on individual complaints rather than a class action suit.

Compensation claims based on individual complaints

In February 2018, over 400 investors were awarded €3.4 million plus interest by the arbiter in a class action complaint. Bank of Valletta has appealed the decisions including on all claims that were handled by Finco Treasury Management.

The arbiter warned in his 2018 ruling that any delay in implementing the compensation decision could negatively affect the bank’s reputation.

“This case had been dragging on for years and the current management has an opportunity to close this case once and for all,” the arbiter said.

Read: Out of court settlement for La Valette Property Fund investors

In the latest awards, handed down in September and January, the financial arbiter again found that BOV had failed to act in the best interest of its clients. He noted in his various rulings that the bank had failed to provide convincing or sufficient evidence that it had fulfilled its obligations in this regard.

The bank was fined €203,000 by the Malta Financial Services Authority in June 2012, with the regulator saying it had failed to act in the best interest of investors, as required in terms of the applicable regulatory framework.

The bank had already offered investors 75c per share in May 2011, amounting to €14.5 million, with a total buyout value of €45 million. However, not all of the investors had accepted it and an out-of-court settlement was reached in 2014 for those whose interests were handled by Finco Treasury Management.

BoV said it had not entered settlement agreements on any claims following decisions of the arbiter, whether the claims were handled by Finco Treasury Management or otherwise.