The Malta Independent 26 June 2022, Sunday

The Malta Independent on Sunday wins libel case on $20m ‘Ponzi scheme’

Malta Independent Tuesday, 22 October 2013, 13:44 Last update: about 9 years ago

A verdict handed down by Magistrate Francesco Depasquale on Monday ruled in favour of The Malta Independent on Sunday editor David Lindsay in a libel case filed jointly by Soleil Group Holdings, Exodus Equities Limited and Exodus Capital Limited.

The article in question, Legal proceedings in Exodus scandal begin in Malta (TMIS 26 September 2010), had dealt with the fact that legal proceedings had begun in Malta at the time with the aim of seeing defrauded American investors beginning to recoup the little that was left of the several millions of dollars sent to Malta after they were swindled back in 2007 in what has been described by the US federal Bureau of Investigation and the Department of Justice as a Ponzi scheme.

The article in question had been based on an application filed before the Courts of Malta by Dr Joseph Schembri, in which the courts were requested to order the three Malta-registered companies to pay up all of what is still left in their bank accounts, accounts that together once held millions of investors’ dollars but which have been practically emptied as international legal wrangling had been dragging on over the past two plus years at the time.

In all, American investors had been defrauded to the tune of at least US$20 million, according to the American courts. Those funds were meant to have gone into legitimate investments, but the majority of the funds were transferred to foreign bank accounts in Malta and elsewhere, including the fiscal grey areas of Switzerland and Andorra, which were controlled by Maltese company Exodus Equities Limited, according to the application filed in the Maltese courts.

In handing down his verdict, Magistrate Depasquale noted that: “It is clear that the defendant had the right and duty to report the case to the public since it was in the national interest, and that the reportage had been based on documentation presented to the courts and as such it was privileged in the eyes of the law.”

“This court cannot but note that...it is clear and beyond any doubt that the defendant, who had already written about this serious issue some two years before, had continued to write about the case after procedures had begun in Malta and he based his article on information produced in court.  The court also has no doubt that that what was written was the result of genuine investigative journalism that was in the public interest.”

The court also threw out the plaintiffs’ objections to the use of the words “Ponzi scheme”, “swindled” and “defrauded” in the article in question, since these terms had been used to describe the situation in the American courts.

In his considerations, Magistrate Depasquale observed, “As such the court cannot understand how the plaintiff companies could have expected that that which was reported by the defendant had been libellous of defamatory in their respect when [the article] actually reflected the facts as they were in the American courts, and which was resolved only after these same companies returned millions of US dollars that had been fraudulently taken from investors by third parties.”

The Malta Independent on Sunday was represented by Dr Peter Fenech.

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