In recent comments to the Australian Financial Review, Joe Longo, Chairman of the Australian Securities and Investments Commission (ASIC), criticized Macquarie Bank for a "reckless disregard for compliance standards" after it allowed suspicious transactions to continue despite repeated warnings from the regulator.
In 2022, Macquarie permitted three clients to place dozens of suspicious trades, resulting in $23.4 million in excess profits. These trades were not stopped due to a coding error in the bank's compliance system, SMARTS. An ASIC review found that Macquarie failed to implement an interim solution when notified about the issue and responded carelessly to the regulator's concerns. "The poor attitude and compliance culture on display in this issue is something the Macquarie board and executives need to reflect on and address," Longo said.
Earlier this year, ASIC imposed a $4.995 million fine for Macquarie's failure to detect these suspicious trades in the energy market. The regulator's review also raised concerns about the company's broader compliance culture and the effectiveness of its compliance staff.
Separately, just last month, Macquarie was fined $117 million USD by the US Securities and Exchange Commission (SEC). The SEC accused the bank of inflating the value of 4,900 mortgage-backed securities between 2017 and 2021, saying that Macquarie had "no reasonable basis" that the assets could sell at the set levels. Although Macquarie did not admit to the SEC's allegations, it agreed to pay the fine.
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