Australia’s securities regulator launched legal action against Macquarie Group, alleging the investment bank misreported up to 1.5 billion short sales over 15 years in a systemic failure, according to Reuters.
The Australian Securities and Investments Commission (ASIC) claims Macquarie Securities, the bank’s brokerage arm, inflated or understated short positions by an average of 12% across 321 securities, with some discrepancies exceeding 50%.
ASIC alleges Macquarie’s automated reporting software generated flawed data from as early as 2009, with issues persisting until 2024 despite internal detection in 2022. The regulator accused the bank of “disregard for operational controls,” arguing its failure to resolve known glitches distorted market insights critical for assessing stock risks.
The Investments Commission is seeking fines that could theoretically reach A$782.5 million ($506 million), calculated under laws tying penalties to turnover and breach volumes. Macquarie, which reported a A$3.5 billion annual profit in May, acknowledged fixing the software after alerting ASIC but said it is “reviewing the claims.”
The lawsuit marks ASIC’s fourth enforcement action against Macquarie in a year, following A$15 million in prior fines. It reflects heightened scrutiny of Australia’s financial sector since a 2019 royal commission exposed lax oversight. The case draws parallels to Westpac’s record A$1.3 billion fine in 2020 for anti-money laundering breaches.
Investors reacted cautiously, with Macquarie shares dipping 1.6% on Tuesday, underperforming a flat broader market. The bank’s stock has fallen 5% this year, contrasting with a 1% rise in the benchmark index.
