BOV holding 158 individuals liable for Falcon Funds losses

Bank of Valletta has filed a judicial letter in Malta’s Civil Court, in which it gave notice that it intends holding 158 individuals and companies responsible for any losses the bank might incur on millions feared lost in the Falcon Funds pensions bust.

The individuals include former Nationalist MP and finance minister Tonio Fenech, who together with Joseph Xuereb and Ian Zammit, was a director of Falcon Funds Sicav, a pension offered on the Swedish private pension platform.

However, investment decisions pertaining to the investment of some €247 million in Swedish pension savings inside Falcon, were taken by Temple Asset Management, an investment office whose director John Anthony Farrell is now in custody in Sweden, to face fraud charges there.

Falcon Funds has also sued TAM in Malta, as well as its chief promoter Emil Amir Ingmanson, real name Max Serwin, a Swedish businessman accused of having been the beneficiary of Falcon cash invested in unsecured investments. Falcon Funds’ directors accused TAM of having invested over €10 million of savers’ cash in what turned out to be an ‘advance’ to Emil Ingmanson and his London company.

Also included in the protest are securitisation company Argentarius Group and its founder Andreas Woelfl, as well as subsidiaries and affiliates Argentarius ETI Management Limited, ETI Securities Plc, Securitisation Consultancy Limited, and Delta1 Securities Plc, clients, and business partners – companies used to ‘hide’ the investment of Falcon cash in illiquid investments through ETIs.

Argentarius, which provides low-cost, regulation-free investment funds known as Exchange Traded Instruments (ETIs) left Malta and is now operating in the Cayman Islands as iMaps Capital, apparently as a result of its legal and regulatory problems in Malta.

Bank of Valletta itself has been served with judicial letters filed by the Swedish Pensions Agency, dated 30 June 2017 and more recently 3 April 2019, through which the agency is holding the bank responsible for any losses and damages it may have suffered with its investment in Falcon Funds.

“Whilst the Bank denied, and continues to categorically deny, any responsibility for these alleged losses and damages, the Bank is formally holding you responsible for any losses and damages suffered and/or that which it may suffer as a result of and/or in connection with any of your acts, omissions, conduct, and/or involvement in relation to Falcon Funds SICAV p.l.c. and/or the sub-funds’ investments and is placing you in dolo, mora and culpa for all effects and purposes at law,” BOV said in its letter.

Falcon Funds director Tonio Fenech and his colleague were given an official reprimand by the financial services regulator, which also  prohibited the directors from accepting any new appointments which require MFSA approval in entities or for activities licensed by the MFSA for a period of two years.

Temple Asset Management, run by John Farrell, was fined a total of €612,000 over breaches of 23 different standard licence conditions and had its licence suspended. Among the breaches, Temple was said to have not cooperated with the MFSA in an open and honest manner, had numerous reporting failures, failed to formulate forecasts and analysis of illiquid assets, due diligence of investments, and did not ensure measures to avoid conflicts of interest.