Clients of Continental Wealth Management have urged STM and Momentum Pensions in Malta to pay compensation they are owed.
In 2020, STM and Momentum Pensions were ordered to pay compensation to clients of CWM and they have lost appeals in Malta against this decision over the last few months.
But one of the clients told International Adviser that no one has received any money back yet.
Continental was the clients’ investment adviser but as it did not have the appropriate licences, it had to turn to STM and Momentum Pensions to make investments on behalf of its customers.
The investments heavily featured structured notes resulting in considerable losses for the clients.
Since 2021, Momentum has lost over 50 appeals, the latest one on 23 February 2022, and STM has lost three.
In all cases, the court sided with the former CWM clients who suffered investment losses.
The client told IA they are now getting frustrated because they are yet to receive the compensation the Maltese court awarded them – which was set at 70% of the losses plus interest at 8% from the date of the original court decision.
They received a letter from Momentum Pensions on 8 February 2022, seen by IA, which stated: “Further to our communication we issued on 31 January 2022, we are writing to you again to keep you updated.
“We confirm that we have now obtained what we needed from your investment companies to finalise the investment computations. We continue to liaise with our insurers and have written again to the Arbiter to seek clarification on the query raised. Additionally, given the compensation payments are Malta-sourced payments, we are currently obtaining tax advice.
“As soon as we have the required clarifications on the above, we will be able to update you further.”
Momentum added in the letter that it could not provide an “exact time period” for compensation payments.
IA understands that the clarifications Momentum has asked for are about the compensation sums, interest due, and any potential application of tax.
But the client, who sought legal advice, said that since they are not Maltese residents, there shouldn’t be any tax implications, and that sums and interest owed had already been set out in the court’s original decision.
A spokesperson for Momentum Pensions told IA: “Momentum Pensions Malta maintains the highest standards in delivering its responsibilities as a trustee and retirement scheme administrator. We respect the decision from the court, and we are following due process and have issued updates to members.”
The client added that the customers who won appeals against STM have not heard anything from the company.
But an STM spokesperson told IA: “We respect the decision from the court, and we are following due process and have issued updates to the members concerned.”