MFSA takes regulatory action against Zenith

The MFSA has taken action against Zenith Finance, the company whose owner (Matthew Pace) and former director (Lorraine Falzon) are currently in court over money laundering charges.

In a notice issued on Friday evening, the MFSA said that it “considers that the Company is not in a position to continue properly servicing its clients whilst adhering to the applicable legal requirements, particularly those relating to the fitness and properness of the Company, the fitness and properness of the Company’s shareholders, as well as the Company’s sound and prudent management. In this regard, on 26 March 2021 the MFSA directed the Company with immediate effect to: refrain from onboarding of new clients and refrain from providing existing clients with any new or additional services; Cease all outgoing transactions from the Company’s client accounts, including intra-client account transactions; and Ensure that the Company and its directors maintain proper safeguard of all records relating to Zenith’s operations, including its investment services activities. The Company should therefore not destroy, conceal or alter such records in any way.”

These Directives shall remain in place until such time as the MFSA may direct otherwise.

“Furthermore, in terms of the Investment Services Act and for the purposes of safeguarding the interests of investors, the MFSA has decided to appoint Mr Stephen Paris to occupy the role of a Competent Person for the Company in order to take charge of the assets of the Company, including any assets related to the investment services business of the Company for the purposes of safeguarding the interests of the investors and consumers of the Company; as well as to assume control of the business of the Company to carry on that business until such time as the Authority may direct and to carry out such other function or functions in respect of such business as the Authority may direct.”

“The appointment of the Competent Person shall remain in force for a period of one (1) year subject to the possibility of renewal as the Authority may direct. It should be noted that the MFSA’s decision may be appealed before the Financial Services Tribunal within the period as prescribed by the applicable law.”

The MFSA also issued a second notice, against Zenith (Tied Insurance Intermediary) Limited.

The Malta Financial Services Authority decided to impose a number of directives against the company as well as appointing a Qualified Person for the Company.

The MFSA also considered that the Company is not in a position to continue properly servicing its clients.

“In this regard, on 26 March 2021 the MFSA directed the Company with immediate effect to: Refrain from onboarding of new clients and refrain from providing existing clients with any new or additional services; Cease all outgoing transactions from the Company’s accounts holding clients’ monies; and Ensure that the Company and its directors maintain proper safeguard of all records relating to Zenith’s operations. The Company should therefore not destroy, conceal or alter such records in any way.”

These Directives shall remain in place until such time as the MFSA may direct otherwise.

The MFSA has decided to appoint Mr Stephen Paris to occupy the role of a Qualified Person for the Company in order to:

[i] liaise with Mapfre MSV Life plc and Mapfre Middlesea plc (“the Principals”) in respect of the relationship between the Company and the Principals and any actions which the Principals deem fit to take vis-à-vis the Company; 

[ii] act as the representative of the Company vis-à-vis the existing clients of the Principals and to ensure that any queries of the clients addressed to the Company are duly answered;  

[iii] safeguard the funds of the clients which are held in the clients’ account; 

[iv] ensure that the records of the Company are duly safeguarded so that nothing is destroyed, concealed or altered; 

[v] act on behalf of the Company in the case that a board of directors is not properly constituted while providing prior approval to the decisions of the board of directors in the case it is properly constituted.

The appointment of the Qualified Person shall remain in force for a period of one (1) year subject to the possibility of renewal as the Authority may direct.