Man fights €150,000 fine, public shaming in legal five-year battle

A man is claiming he was wrongly listed on the Malta Financial Services Authority (MFSA) website as someone who provided unlicensed services over the past five years.

He filed a case arguing that this has caused him significant reputational damage.

According to the man, the system used by the authority is unconstitutional because it does not provide an opportunity to challenge the decision – including a €150,000 fine – within a reasonable time.

He has been contesting this listing for five years, yet his name remains publicly visible online.

In a case filed before the First Hall of the Civil Court, he challenged the current structure and operation of the Financial Services Tribunal.

He explained that his interest in investments began in the 1970s when he started managing his own finances.

As his success grew, friends and family sought his guidance, which he provided. Over time, he started assisting them by filling out forms from an investment company and handing over cheques on behalf of himself and his relatives and friends. All parties were aware of this arrangement.

He has now filed a human rights claim, arguing that several of his fundamental rights have been breached

In 2007, the investment company invited him to enter into a business introducer agreement to comply with a new EU directive, which he accepted. Years later, after that relationship ended, he signed a new relationship consultant agreement with another company.

In June 2020, the MFSA informed him it suspected him of offering unlicensed investment services and intended to impose an administrative penalty of €150,000. He contested the claims and pointed out that the documents provided by the MFSA were heavily redacted and incomplete.

Nevertheless, in September 2020, the MFSA imposed the fine and published his name on its website.

He appealed the decision to the Financial Services Tribunal under the MFSA Act. However, the appeal has been pending for over five years, during which time his name has remained publicly accessible. As a result, he started a judicial review case before the First Hall Civil Court, which is still pending, awaiting the outcome of the appeal.

He has now filed a human rights claim, arguing that several of his fundamental rights have been breached. These include the right of access to a court in a manner that is practical and effective.

He maintains that the excessive delay in proceedings violates this right and amounts to a denial of justice, as the prolonged inaction of the tribunal has rendered the legal remedy ineffective.

Decision 'breaches principles of fairness'

He further argued that the MFSA reached its decision without granting him full access to the evidence and documentation, thereby breaching principles of fairness, including equality of arms and transparency.

This lack of access persisted for five years and had severely undermined his ability to present an effective defence.

Additionally, he contended that a tribunal must have full jurisdiction over both facts and law. In his view, the Financial Services Tribunal did not meet this standard. Its appeal process was limited in scope, and while a further appeal to the Court of Appeal existed, it was confined to points of law.

This setup, he argued, prevented a comprehensive review of his case and constituted a structural violation of his right to a fair hearing.

He also claimed that, given the severity of the fine, the proceedings may be considered criminal in nature.

Finally, he claimed that the continued online publication of his name and the resulting reputational harm constitute a violation of his right to respect for private and family life.

He called on the court to rule that his rights had been breached and to hold the MFSA, the permanent secretary within the Finance Ministry and the State Advocate liable in damages.

Lawyers Edward Zammit Lewis, Michael Camilleri and Michela Scalpello represented the man.