Issue link: https://maltatoday.uberflip.com/i/368911
maltatoday, SUNDAY, 24 AUGUST 2014 8 News MAT THEW AGIUS AN Attard couple has filed a judi- cial protest against a financial serv- ices firm, claiming that the compa- ny's owner is trying to transfer the company's assets to a family trust in a bid to avoid financial claims over investment breaches. Carmelo and Mary Grace Mallia claimed All Invest Co. Ltd "took advantage of their lack of [finan- cial] knowledge and experience" to invest their savings in several financial instruments, at a con- siderable loss that MaltaToday understands is in the hundreds of thousands. The Mallia couple filed the pro- test against All Invest and its direc- tor, Wallace Falzon, as well as his wife Rose Falzon, both in their per- sonal capacity and as representa- tives of their son, Keith who is a minor, their other son Kenneth, and Patrick Massa, Rosewall In- vestments Ltd, and FZD Trustees and Fiduciary Services, of which Nationalist MP Francis Zammit Dimech is a director. Wallace Falzon is alleged to have colluded with the other Falzons and Rosewall Investments Ltd, to divest himself of the assets he ac- cumulated through the company and then began court proceedings to declare the company insolvent. The Mallias further claim that Falzon's insolvency was achieved through transfers of property, shares and cash "intended to en- able the defendants to elude their obligations". In a previous but related case, the Director General of the Malta Financial Services Authority de- clared under oath that Wallace Falzon had been "planning… since March… to park his assets in vari- ous places. For example, he set up a company that created a trust into which he placed the assets of his in- vestment company, he transferred other properties to his children or to his wife – there is no commu- nity of acquests. Furthermore we were made aware that he emanci- pated one of his children so that [the child] would be able to accept properties that he was planning to squirrel away [ibewwex 'l hemm]." The protest even includes a note to FZD Trustees to abstain from acting in Falzon's interests, warn- ing that the company and their di- rectors will be held responsible "in the case that it emerges that they knowingly assisted the defendants to elude their obligations towards their creditors". The Mallias claim they were mis- led into investing their life savings in high-risk financial instruments over a period of five years from 2007-2012, resulting in their com- plete loss. The investments include vari- ous instruments in RBS, Barclays, Lloyds, and SNS Bank. The plaintiffs allege that All In- vest representatives sold them in- vestments that were "high risk and in some cases downright specula- tive", that were ideal only for ex- perienced, professional investors, without performing the necessary due diligence on the investment providers themselves. They said the company did not fully disclose, nor explain the level of risk involved in a manner in which they could understand, and that the investments them- selves "were neither suitable nor appropriate for [their] personal circumstances [given their] lack of knowledge and experience in investments, their financial objec- tives and their attitude towards risk." The couple bought the invest- ments "on insistent advice from its representatives" whose "only objective was to sell and gather their commission, regardless of the damage to the complainants and with absolute disregard to their client's interests". They also said that All Invest then advised them to cede, at a loss, an insurance policy they themselves had sold, in order to reinvest the sum recovered using the instru- ments in question, leading to sub- stantial gain for the defendants. MFSA licence suspension The Malta Financial Services Au- thority suspended the investment services licence of All Invest after "identifying a series of regulatory breaches" in June 2013. According to the MFSA, it had "in- vestigated the manner in which All Invest had sold complex investment products to retail investors" and "that, in a number of instances, All Invest failed to act in the best interest of in- vestors as required of all firms which provide investment services". In its report, the Authority had con- cluded that, in addition to this breach, the company also did not maintain sufficient records to demonstrate compliance with regulations and conditions of its investment services licence. All Invest submitted an appeal on 10 July, 2013 before the Financial Serv- ices Tribunal against the MFSA's decision to suspend the company's investment services licence. Supply and Delivery of Self-Tapping Ferrule Straps for the Water Services Corporation Clients accuse All Invest director of divesting wealth using bankruptcy