A pre-paid credit card company that caters for “high and ultra-high net worth individuals worldwide” has been slapped with a €142,000 administrative penalty by the financial services watchdog.

In a statement issued on its website, the MFSA said it had fined Insignia Cards Ltd over a number of breaches.

The MFSA determined that the company had breached rules related to proper record keeping arrangements and had failed to properly safeguard clients’ funds.

It also found failures in alignment of internal documentation with statutory obligations, failure to notify the Authority of the outsourcing of operational functions, weak governance arrangements and a breaches related to the provision of information to the authority.

Besides the €142,000 fine, the company was also ordered to cease the prefunding of charge cards with immediate effect, cease the processing of payments from Insignia Global Solutions Limited and Insignia Med Limited with immediate effect, and appoint an independent third-party firm to provide guidance.

The authority’s decision may be appealed before the Financial Services Tribunal within the period established by the applicable law.

Insignia Cards was in the news last year after it had employed former Economy Minister Chris Cardona. The latter resigned amid the Daphne Caruana Galizia murder scandal, which pointed to involvement by government officials.

In December of 2020, the company had already been fined €373,000 by the Financial Intelligence Analysis Unit (FIAU) over money laundering compliance breaches.

In a statement in response to the news, Insignia Cards said that it was surprised to have been fined in a time when it is working on expanding abroad.

“Further to statements made in certain sections of the media, Insignia Cards Limited would like to comment on the recent decision and fine imposed by the MFSA. At a time when the company is planning major expansion and investments in Malta in line with its global strategy linked to its operational network in New York, London, Monaco, Dubai and Bratislava, the Christmas eve MFSA announcement is to say the least unexpected,” the company said. 

The company also criticised the Times of Malta, saying that the article carried by the newspaper “is solely intended to damage the reputation of the Company at a time when the Insignia Group is planning major investments most of which directed towards Malta.” 

“Furthermore, the compliance issues raised by the MFSA in their Christmas eve statement have been remediated by Insignia Cards Ltd. To this effect, the MFSA decision will be appealed in the coming days and Insignia Cards Limited are confident that the matter will be resolved. It must be said that other regulatory issues raised by the FIAU have also been remediated through a plan (agreed with the FIAU) and the company believes that there should be a positive outcome on that as well. The Company reiterates that its objective has always been to operate a well-regulated business in Malta ensuring the highest compliance standards. Engaging constructively with regulators is part and parcel of a financial institution like Insignia Cards Ltd and our aim is to maintain such level of engagement with all regulators,” the company said.