MFSA’s Reputation Crisis

Will New CEO Joseph Gavin Restore Malta’s Financial Regulator?

The Malta Financial Services Authority (MFSA) is undergoing another leadership transition after a series of high-profile scandals and allegations of regulatory failure. As reported by the Times of Malta, Irish legal expert Joseph Gavin (LinkedIn) has been named the next Chief Executive Officer of the MFSA. He is set to assume office in September, following the controversial departure of Joseph Cuschieri.

A Scandal That Shook the Regulator

Cuschieri resigned in November after it emerged that he had traveled to Las Vegas in 2018 alongside casino magnate Yorgen Fenech, who allegedly covered the expenses for the trip. Fenech is currently under investigation in connection with the murder of journalist Daphne Caruana Galizia. Following Cuschieri’s exit, Christopher P. Buttigieg, a close associate, has been serving as acting CEO.

The MFSA’s reputation has plummeted under previous leadership, accused of turning a blind eye to rampant money laundering, fraud schemes, and cozy relationships with the very entities it was supposed to regulate.

Joseph Gavin’s Background

According to his LinkedIn profile, Joseph Gavin brings over three decades of experience in financial services across Ireland, Europe, and the United States. He has served as General Counsel to the Central Bank of Ireland and currently leads the Financial Services division at ByrneWallace LLP, one of Ireland’s top law firms, employing nearly 300 professionals, including 43 senior partners.

His experience spans a wide range of regulatory and compliance matters, making him a hopeful candidate for reforming Malta’s struggling regulator.

Malta on FATF’s Grey List

In a confidential vote on June 25, the Financial Action Task Force (FATF) officially added Malta to its grey list of jurisdictions with “strategic deficiencies” in anti-money laundering and counter-terrorism financing (AML/CFT). The decision marked Malta’s entry into a group of 20 nations, including Zimbabwe, Panama, Syria, Myanmar, and Albania, now subject to increased international scrutiny.

This development followed years of inadequate enforcement by the MFSA and a lack of transparency in its supervisory roles.

Systemic Failures and Conflicts of Interest

The leadership trio of Cuschieri, Edwina Licari, and Christopher Buttigieg has been widely criticized for contributing to the MFSA’s deteriorating credibility. Reports indicate that MFSA insiders maintained uncomfortably close ties with licensed entities, undermining regulatory independence and creating severe conflicts of interest.

Such behaviors may have directly influenced the FATF’s greylisting decision, suggesting systemic weaknesses within Malta’s financial regulatory framework.

A Tarnished Image Among EU Regulators

Among EU watchdogs, the MFSA now shares a poor reputation with CySEC, the Cyprus Securities and Exchange Commission, which has also come under fire for lax enforcement. However, Cyprus is perceived to be politically shielded, particularly by Israel, which may afford it greater protection from international bodies such as FATF or Moneyval.

A Chance to Reboot?

All eyes are now on Joseph Gavin, who inherits a battered institution in dire need of reform. The big question remains: can he turn the tide and reestablish the MFSA as a competent and trustworthy authority?

The Scam-Or Project will be monitoring the developments closely as Malta attempts to repair its international standing.

We wish Mr. Gavin success in the challenging road ahead.