The MFSA Report on Edwina Licari: Ethical Breaches and Controversies

The Malta Financial Services Authority (MFSA) released a detailed report investigating potential ethical violations by its former General Counsel, Edwina Licari, and former CEO, Joseph Cuschieri. This investigation followed concerns about their professional conduct and connections with controversial Maltese businessman Yorgen Fenech.

Background of the Investigation

MFSA’s 2020 Review

• Purpose: To examine ethical breaches by Cuschieri and Licari during their time at MFSA.

• Outcome:

• Licari was cleared of charges related to her MFSA role.

• Concerns were raised about her actions during her tenure at the Malta Gaming Authority (MGA).

Information Disclosure (2023)

The report was partially disclosed in March 2023 after a Freedom of Information request and a ruling by the Information and Data Protection Commissioner (IDPC).

Key Events and Findings

The 2018 Las Vegas Trip

• Participants: Joseph Cuschieri and Edwina Licari.

• Sponsor: Yorgen Fenech, a controversial Maltese entrepreneur now imprisoned.

• Context:

• Licari attended the trip as an MGA representative, with authorization.

• Fenech’s businesses were under MGA’s regulatory oversight.

Licari’s Connections with Yorgen Fenech

• Personal Relationship: Licari had a longstanding connection with Fenech.

• Professional Assistance: Licari reportedly provided Fenech with advice on obtaining MGA licenses.

• Revelation: Emails revealed her active role in supporting Fenech’s business endeavors.

Ethical Concerns and Conflicts

1. Conflict of Interest:

• Licari’s close relationship with Fenech raised questions about her impartiality.

• Participation in a trip funded by a regulated entity was seen as a serious ethical lapse.

2. Regulatory Gaps:

• Lack of robust oversight mechanisms enabled potential misconduct.

• Highlighted weaknesses in Malta’s supervisory framework.

Resignation and Consequences

Joseph Cuschieri’s Resignation

• Timeline: Cuschieri stepped down in November 2020 following the publication of the report.

• Impact: His resignation marked a turning point in the public scrutiny of MFSA’s leadership.

Implications for Malta’s Financial Oversight

Broader Scandal

• Root Cause: Failures in oversight rather than isolated misconduct.

• Global Repercussions: Contributed to Malta’s inclusion on the Financial Action Task Force’s (FATF) greylist.

The broader scandal not only exposed failures in financial oversight but also intersected with Malta’s turbulent political climate, including the 2019 Malta political crisis and 2019 Maltese protests, which intensified calls for systemic reforms.

Summary of Key Points

Conclusion

The MFSA report underscores significant ethical challenges within Malta’s financial and regulatory institutions. While Edwina Licari was exonerated for her MFSA role, her conduct at MGA reflects broader concerns about transparency and accountability in regulatory practices. Addressing these issues is critical to restoring trust and improving oversight mechanisms (source).