Maltese ARM investors could be eligible for £50,000 compensation
The Malta Financial Services Authority today said that Maltese investors who held securities issued by ARM might be eligible for compensation of up to £50,000 per person.
The Authority explained that in Malta, securities issued by ARM were sold through a number of financial intermediaries. At the time, a company in the UK called Catalyst Investment Group Limited (Catalyst), licensed by the UK’s financial regulator, had actively promoted investment in securities issued by ARM via a network of intermediaries located in the UK as well as Malta.
The UK’s financial regulator has carried out an investigation into Catalyst and in October 2013 it declared Catalyst to be in default and so, unable to satisfy claims made against it.
According to UK law, in such situations, investors who might have been misled by firms authorised in the UK, can be eligible to receive compensation from the UK’s Financial Services Compensation Scheme (FSCS).
Following an analysis of the product documentation on ARM which Catalyst was responsible for, FSCS is considering whether Catalyst could be liable for some of the losses sustained by some of the investors in ARM.
Over these past few weeks, the MFSA has been actively collaborating with the UK’s financial regulator and has been in continuous discussion with FSCS in order to determine whether Maltese investors in ARM securities can submit claims to FSCS.
The MFSA said that at this stage, it is premature to say whether FSCS will decide that Maltese investors in ARM might be eligible for compensation. Although it is worth noting that if FSCS decides that Maltese investors can make valid claims in respect of Catalyst’s actions, the maximum amount of compensation payable per person is £50,000.