The Federal Court of Australia has ordered Macquarie Bank Ltd to pay a $10 million fine for failing to have effective controls to prevent and detect unauthorized fee transactions carried out by third parties, such as financial advisers, in customer cash management accounts using Macquarie’s bulk trading capability.
Macquarie allowed its clients to give third parties, such as financial advisers, brokers and accountants, different levels of authority to trade in their accounts, including a limited authority to take third party commissions.
Macquarie has also made available to third parties a bulk transaction tool for making multiple withdrawals to multiple customer accounts at the same time.
Between 1 May 2016 and 15 January 2020, Macquarie failed to implement effective controls to monitor whether bulk third-party transactions under the fee authority actually involved charges.
While Macquarie initially defended the process, it later admitted it breached its duty to provide its financial services efficiently, honestly and fairly.
Macquarie agreed to pay a $10 million fine for its conduct.