Five investors have been awarded over €31,000 in compensation after losing money they invested with Crystal Finance at a time when the firm was owned by former Central Bank of Malta deputy governor Alfred Mifsud.
In a series of decisions handed down by the financial arbiter last month, Crystal Finance was held responsible for losses incurred by the investors.
Mr Mifsud sold his interests in Crystal Finance 11 months after he was appointed deputy governor 2015. He stepped down from the role in 2017 following allegations published by slain journalist Daphne Caruana Galizia.
In one of the cases, the financial arbiter said that Crystal Finance failed to safeguard the interests of two of its clients.
The two clients, a security guard and a hairdresser, were classified as having a medium-risk profile yet were sold a medium-high risk investment. They were compensated a total of €14,400 for the money they lost in the investments.
The risk the client was exposed to did not tally with her income
Another case decided by the arbiter found that Crystal Finance unilaterally raised a client’s risk appetite profile to tally with an investment sold to her.
The arbiter found that the client trusted Crystal Finance and would not have proceeded with the investment if the risk was known to her.
It was also found that the client had an income of €3,000 and no other assets.
The risk the client was exposed to did not tally with her annual income, the arbiter found.
She was awarded €10,500 for the money she lost through the Crystal Finance investments.
Yet another client was awarded €600 after it was found that he was not notified about significant depreciations in his bond investment.
In another case, the arbiter awarded an investor €6,300 in compensation because Crystal Finance did not inform him about the negative trajectory his investment was taking.
The client’s claim that the investment had been miss-sold to him was dismissed by the arbiter.
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