On 5 January, the Malta Financial Services Authority (MFSA) revealed that it has imposed an administrative penalty of €175,174 on Bank of Valletta plc (BOV) for regulatory breaches related to disclosure of information and suitability of financial instruments sold to the general public. This penalty is the result of an investigation into the manner in which some securities had been sold to investors including perpetual bonds and other preferred securities following a number of complaints against the Bank.
Moreover, the MFSA recommended to the Bank to compensate the aggrieved investors. In fact, the Authority confirmed that BOV has already reached a private settlement with certain investors. However, in a number of other cases, BOV disagreed with the Authority’s findings and recommendations. In its announcement, the MFSA clarified that in cases of consumer complaints it can only make recommendations. Therefore, if the Bank or complainant do not choose to accept the decision by the MFSA, the matter can be pursued through other legal means.
BOV has a right to appeal this decision by Thursday 26 January 2012.
In conclusion, the MFSA noted that it will continue investigating any current and new complaints against the Bank in relation to these preferred securities.
This is the second fine imposed by the MFSA on BOV in just over 6 months. Back in June 2011, the MFSA had imposed an administrative penalty on BOV and Valletta Fund Management Ltd (VFM), amounting to €197,995 and €149,821 respectively, on the basis of failures in the administration of the La Valette Multi-Manager Property Fund. Further details on this are available here.