It claims this will have ‘potential wider repercussions for the industry
Momentum Pensions Malta has seen its efforts to overturn a ruling ordering it to pay compensation to 50 former Continental Wealth Management (CWM) clients quashed.
Presiding judge Lawrence Mintoff sided with the customers in all of the appeals – 43 of which were combined into a single case, while seven were handled individually.
The decisions were published on 19 January 2022 and saw the pension firm ordered to pay them compensation. At the time of publication, the Maltese court of appeal did not disclose the sums awarded.
They can be found via this link, under Court of Appeal (Civil, Inferior).
In one of the appeal decisions, which International Adviser translated from Maltese, judge Mintoff said: “The court decides on the appeal of the company dismissing the appellant [Momentum], upholding the contested decision in its entirety.
“The costs of the proceedings before the arbiter shall remain as decided, meanwhile the costs of this appeal shall be borne by the appellant company.”
The pension firm also lost two appeals in December 2021.
Disappointed
A spokesperson for Momentum told IA: “Momentum Pensions Malta maintains the highest standards in delivering its responsibilities as a trustee and retirement scheme administrator and only deals with regulated advisers and reputable discretionary fund managers working to clear investment guidelines.
“We did not provide investment advice to the customers affected by the collapse of Continental Wealth Management in 2017 and always ensured that scheme investments were executed in accordance with Malta regulatory requirements.
“Whilst we respect the decision from the court, we are disappointed that no consideration was given to the involvement of the other parties which is subject to ongoing litigation. We believe this decision has potential wider repercussions for the Malta pensions industry. “
The case
CWM was appointed as an investment adviser by the clients in question. The problem, however, was that the wealth firm did not have appropriate licences.
It then instructed Momentum and STM Malta Trust to make investments on behalf of its clients, but they heavily featured structured notes, resulting in considerable losses to the CWM customers.
As a result, in 2020, Momentum was ordered to compensate CWM clients but it appealed the ruling, and so was STM who also appealed the decision, but lost in three instances in early December 2021.
Momentum Pensions is not related to Momentum Global Investment Management.