Times of Malta has published an article mentioning the recent case of arbitrary assets freeze by Bank of Valletta. The full text of the article follows:
"Assets to remain frozen pending investigation
A judge has ordered Bank of Valletta to allow a Malta-based financial services company to access clients’ accounts when a temporary freezing order over a money laundering investigation is lifted.
Madam Justice Lorraine Schembri Orland gave this order after hearing Bank of Valletta admit it had arbitrarily disallowed Exante Limited from accessing its accounts when it learnt that the firm was being investigated by the US Securities and Exchange Commission over allegations of money laundering.
Refusing to accept it had acted illegally, the bank’s lawyers said its action was taken as a precaution and could, at most, be termed “arbitrary”.
The decision to bar access to the accounts led Exante Ltd to file an application in the First Hall of the Civil Court requesting the bank to allow access to clients’ accounts, which Exante insisted were funds belonging to its clients.
While the case was still pending, an investigation and attachment order issued by the court on August 18 obliged the bank to freeze the company’s assets.
The judge heard Exante complain that BOV had frozen the accounts prior to the order. The bank, however, insisted that, as soon as money laundering was suspected, banks are obliged to file a report and cease access to any transactions on all accounts.
Exante is being investigated for alleged involvement in a suspected scheme that saw traders and hackers make illicit profits over five years. The company is alleged to have illicitly made $24.5 million “ill-gotten gains” in a lawsuit filed by the US Security and Exchange Commission.
Company director Alexey Kirienko, a Russian national, told Madam Justice Schembri Orland the allegations made by the US commission against the company were “vexatious”. He said the company was being mentioned as operator of a Malta-based hedge fund when in fact it was a licensed broker.
He pointed out that the company was forcefully denying all allegations and had instructed Washington-based legal firm Schulte Roth and Zabel to defend it in the US proceedings.
In her ruling, Madam Justice Schembri Orland noted that the August 18 order came after the bank had denied access to accounts. As a result of the order, which formed part of the local anti-money laundering legal framework, the company’s assets were to remain frozen pending an investigation.
The judge, therefore, upheld Exante’s requests and ordered BOV to grant the company access once the temporary freezing order was lifted following the investigation."
