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 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.

It follows three similar cases that International Adviser reported last week – one of which involved STM and two others related to Momentum Pensions Malta.

All revolve around investment advice given by CWM, which was an unregulated firm.

Retroactive application

The trustees argued that they are being unfairly penalised by the retroactive application of legislation.

In 2019, rules were introduced requiring product and service providers to verify the regulatory status of investment advisers.

CWM collapsed in 2017 – two years before this was a legal requirement.

But the appeals court agreed with the complainants that they had a higher duty to act in the best interests of their clients, whose portfolios were heavily weighted to structured notes.

STM now has to pay 70% of the losses incurred by the client.

More to come?

In July 2020, Momentum Pensions Malta was ordered to pay compensation to 55 former clients of CWM.

The company appealed and, to date, has lost two of those cases – leaving 53 outstanding.

It is not clear how many further cases, if any, STM Malta Trust Company is waiting to learn the outcome of.

International Adviser has reached out to STM for a comment on the latest case.

On Monday, the Paris Court of Appeal stated that its deliberations have been extended and a decision is now expected on 13 December.

The banking giant has only set aside €450m to pay the €4.5bn (£3.8bn, $5.3bn) penalty that was handed down after it was found guilty of aggravated money laundering and illegal bank soliciting by a French court in February 2019.

The Zurich-based bank was found to have sent UBS employees to solicit wealthy executives and athletes at sporting and music events in France, urging them to place their money in Switzerland.

Between 2004 and 2012, it concealed assets worth €10bn in the Alpine country on behalf of French clients.

UBS has consistently denied any wrongdoing.

Greatly exceeded

A perusal of the bank’s Q2 financial report, dated 20 July 2021, shows that it is sticking to its guns.

“UBS believes that based on both the law and the facts the judgement of the court of first instance should be reversed.

“UBS believes it followed its obligations under Swiss and French laws as well as the European Savings Tax Directive. Even assuming liability, which it contests, UBS believes the penalties and damage amounts awarded greatly exceed the amounts that could be supported by the law and the facts.

“In particular, UBS believes the court incorrectly based the penalty on the total regularised assets rather than on any unpaid taxes on those assets for which a fraud has been characterised and further incorrectly awarded damages based on costs that were not proven by the civil party.

“Notwithstanding that UBS believes it should be acquitted, our balance sheet at 30 June 2021 reflected provisions with respect to this matter in an amount of €450m.”

Given the potential range of outcomes, UBS said the sum “reflects our best estimate of possible financial implications”.

The law firm, on Tuesday, issued a claim on behalf of an initial group of 100 former investors in Neil Woodford’s defunct fund.

In March, it sent Link a letter before action, which is required in the UK to trigger the litigation process.

The letter alleged the ACD mismanaged the £3.6bn ($4.9bn, €4.2bn) fund and failed to maintain appropriate levels of liquidity, which ultimately led to its collapse.

Three months later, Link’s lawyers, Clifford Chance, came back with a 40-page response, stating the former Woodford Equity Investment Fund (WEIF) gatekeeper refused to compensate investors and would “vigorously defend” the claim.

Leigh Day said the case has now reached a stage where “it has become necessary to issue proceedings to trigger a court timetable and take the matter through to trial as speedily as possible”.

One of the firm’s partners, Boz Michalowska, commented: “This is a big step forward in the legal action which we hope will allow investors of the Woodford Equity Income fund to get justice and their hard-earned pensions and savings returned to them.”

Court timetable set in motion

It is unclear whether the Woodford case will appear on the docket before the year’s end.

Our sister publication Portfolio Adviser, which first reported the story, understands that from issuing proceedings claimants will have four months to serve Link with their particulars of claim, which sets out what the dispute is about. Link will then respond by filing a defence.

After this, the court decides on matters including the timeline for disclosure of documents, exchange of witness statements and expert reports and will fix a date for trial.

11,000 clients

Leigh Day’s legal challenge against Link for its alleged failings in the Woodford saga has continued gathering steam. When Portfolio Adviser spoke to the law firm back in February it was representing 4,500 clients and had just been endorsed by UK shareholder society, Sharesoc.

It has now been instructed by over 11,000 claimants impacted by the Woodford debacle.

Leigh Day said it is planning to issue proceedings on a rolling basis for all its clients. The claims will then be consolidated under a group litigation order so that the risks, costs and benefits can be shared by all claimants on the group action register.

Several other firms are also going after Link for its role in the Woodford saga, including Harcus Parker. Though the London litigator has gone through the initial steps of triggering litigation against Link and had been hoping to launch a case before the summer there has been no update as of yet.

In March RGL Management launched formal proceedings against Hargreaves Lansdown for its continued cheerleading of Woodford’s fund. It is simultaneously pursuing a claim against Link for its role in the fund’s demise.

For more insight on UK wealth management, please click on www.portfolio-adviser.com

He originally pleaded not guilty in November 2020.

Not for sale

The forged document relates to proceedings brought by the Financial Conduct Authority against an individual named Renwick Haddow.

Haddow operated several unauthorised collective investment schemes. He was ordered by the high court to pay £16.9m ($23m, €19.7m) in restitution to investors.

Among his assets was an interest in a property in London, which should have been liquidated.

However, Allen forged a trust deed to hide Haddow’s interest in the property knowing that it would reduce the sum available for the restitution payments.

£1m property

At sentencing, judge Bartle QC said: “There came a time when Mr Allen was aware of what was going on and he forged the deed in circumstances indicated – an extremely serious matter knowing what consequences would be.”

Mark Steward, executive director of enforcement and market oversight, said: “Mr Allen deliberately disguised the true ownership of a central London property worth more than £1m, frustrating payment of compensation to victims of Mr Haddow’s unauthorised investment scheme.

“This is a serious facilitating offence. The FCA will pursue those who facilitate financial crime as well as principal offenders.”

Multiple offender

According to the FCA, Haddow is currently in the US awaiting sentence having pleaded guilty to a separate fraud prosecuted by the department of justice.

In 2018, he was charged by the US Securities and Exchange Commission (SEC) with misleading investors in a separate $37m (£27m, €31.6m) scam.