On 4 June, Bank of Valletta plc announced that it has received a notice from the Malta Financial Services Authority’s on the conclusion with respect to the sales practices adopted by the Bank in connection with the La Valette Multi Manager Property Fund (LVMMPF).
The findings of the MFSA, which may be appealed by the Bank within 30 days, allege breaches of certain conditions and guidelines. The Authority has now directed the Bank to fully cooperate with a review of the investors’ individual files which is to be carried by an independent professional service firm to determine whether each respective investor falls within the experienced investor category. According to the prospectus, an investor must have invested at least a sum of USD50,000 over the previous five-year period. The MFSA further added that any individuals classified as not eligible to invest in the Fund shall be entitled for compensation from the Bank amounting to €1 per share less any compensation already received. In May 2011, the Bank offered €0.75 to shareholders in return of full and final settlement on any claims and to acquire ownership of the shares. A total of 99% LVMMPF investors accepted this offer.
Moreover, the MFSA imposed an administrative penalty of €203,150 on the Bank in this respect, part of which may be returned to the Bank following the completion of the individual investors’ file review.
On its part Bank of Valletta reported that is giving its careful consideration to the communications received from the MFSA and will consider its position in terms of the Investment Services Act accordingly. The Bank also announced that at this point, the Board of Directors do not believe that the results for the financial year ending 30 September 2012 will contain a material charge against profits arising from the La Valette Multi Manager Property Fund.