The Malta Financial Services Authority, MFSA, confirmed yesterday that it had received a number of queries from clients of Crystal Finance Investments Ltd asking about their investment portfolio. The authority was replying to questions sent by this paper after several clients of the firm asked it to launch an investigation after they reportedly lost savings they had invested through the company. Clients were again queuing at the MFSA yesterday.

Crystal Finance has acknowledged that losses may have taken place but is insisting that it has not done anything wrong, pointing out that it was inevitable that certain investment products would not perform to expectations from time to time.

An MFSA spokesman told The Malta Independent yesterday that the Authority "has to exercise discretion and prudence in such cases and it is obliged to act within the law, including the rules on confidentiality."

The authority is recommending to investors to first try and seek information about their portfolio from the firm itself.  "In this regard those investors who have been contacted directly by the company should arrange for an appointment with their financial adviser to assess their portfolio.  Investors who have not been contacted by the company, should nonetheless contact the company at the first available opportunity for an appointment to review their portfolio. The Authority strongly recommends that investors are to take stock of their situation by first referring to the documents they had been given, and signed for, at the time of their investment."

A consumer-oriented MFSA website - mymoneybox.mfsa.com.mt - tells consumers that they should first lodge a complaint with their financial intermediary. If they are still not satisfied or do not receive a reply within two months from lodging their complaint, clients can file a complaint with the MFSA's Consumer Complaints Manager and then to the authority. The MFSA warns that its recommendation may or may not be accepted by the intermediaries and it cannot enforce a recommendation on either party. This does not deprive consumers the right to take the matter to court.

Crystal Finance Investment chairman Alfred Mifsud told this paper last week that that the investment products in question were "simple products, not complex ones, which were sold properly." Reacting to "sensationalist" reports in PN newspaper In-Nazzjon, Mr Mifsud said it was not easy to quantify losses but, since the company had many clients, it was possible that their collective losses would amount to millions of euros.

In its own statement, the company also insisted that only a small part of clients' investment portfolio was affected, stating that diversification was the rule to mitigate such effects. However, it added, the more one diversified the higher the risk of an investment underperforming became.

Mr Mifsud insisted that Crystal Finance was keeping its clients informed, sending them updates every six months and also informing them of negative developments as soon as they could confirm the information. He also noted that the company has an impeccable, 14-year reputation. "There is always some risk, and this would not be the first time that certain funds did not meet expectations... but judgment should not be passed on this single case alone."