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MFSA Working With Lawyers To Defend Decisions “Taken In Good Faith”, CEO Confirms

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MFSA CEO Joseph Cuschieri has weighed in on the ongoing battle that the financial services watchdog has found itself in with Pilatus Bank. Yesterday, it was reported that Pilatus Bank’s directors are suing the Malta Financial Services Authority for damages following a series of events that have burdened them with hefty costs since the arrest of the bank’s ultimate beneficial owner, Ali Sadr Hasheminejad.

Asked to comment, Mr. Cuschieri pointed out that Pilatus Bank had every right at law to sue the MFSA. “On our part, we are already working with our lawyers to defend the Authority’s decisions in court,” Cuschieri told Lovin Malta.

“I insist that all MFSA’s decisions are taken in good faith following proper analysis and due process within the legal parameters allowed at law,” Cuschieri finished.

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MFSA premises in Attard

Pilatus Bank has been heavily featured in local and international news over the past two years. It is alleged that the bank was used to channel millions from Azerbaijan to Europe, and it is these serious allegations that resulted in the arrest of Mr. Hasheminejad in the US.

The case against Mr. Hasheminejad is still ongoing and as such, he has not yet been proven guilty of the alleged crime. However, Mr. Hasheminejad’s arrest prompted the MFSA to take control of the bank’s assets in March 2018 and to proceed with appointing Lawrence Connell, an American financial regulator, as administrator of the bank’s assets. The MFSA then proceeded to file a recommendation with the European Central Bank for the withdrawal of the bank’s license in June 2018.

In response to these measures, Pilatus Bank filed a judicial protest against the MFSA in August 2018, calling for the Authority to withdraw the directives it imposed and threatening further legal action for damages incurred.

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Pilatus Bank premises in Ta’ Xbiex

This weekend, Pilatus Bank delivered on its promise and sued the financial services watchdog in the hope of regaining control over the bank. They continue to assert that the irrational severe action taken by the MFSA against the bank is motivated by public opinion and prejudices. Additionally, the appointment of Mr. Connell has cost the directors around $100,000 a month, despite the bank no longer being in operation. This charge includes his monthly fee of $50,000, the salary of his two assistants (which amounts to $800 for every day of work at the bank), and expense bills of around $15,000 a month, which include costs of 5-star hotels and wining and dining costs. These are over and above the loss of earnings that the bank has suffered since being closed down.

What do you make of this latest development? Let us know in the comments below

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