In a statement on Wednesday, ASIC said it is suing Macquarie Securities over allegations that, between 11 December 2009 and 14 February 2024, it failed to correctly report the volume of short sales by at least 73 million.
ASIC estimates that this could be between 298 million and 1.5 billion short sales.
In its first short sale reporting case, the regulator alleges the misleading conduct was due to multiple systems-related issues, many of which remained undetected for over a decade.
“This action is timely given significant recent global market volatility. Accurate and reliable data underpins the integrity of, and confidence in, Australia’s financial markets. Investors expect reliable information to analyse market movements and inform their investment decisions,” said ASIC chair Joe Longo.
“We allege Macquarie’s failures may have led to the financial services industry relying on misleading and false information for over 14 years.
“MSAL’s repeated systemic failure to detect and resolve these issues indicated serious neglect of its systems and disregard for operational controls and technological governance.”
ASIC’s announcement marks the fourth regulatory action it has taken against Macquarie Group in just over 12 months.
Just earlier this month, ASIC took further action against Macquarie Bank, citing “multiple and significant” compliance failures – some going undetected for many years and one for a decade.
“Our actions reflect the ongoing and deep concerns we have with Macquarie Group and its weak remediation of longstanding issues, which led us to impose additional conditions on Macquarie Bank’s Australian Financial Services licence only last week,” Longo said.
In 2020, MSAL undertook a review of its short sale reporting process following weaknesses identified in 2015 and 2019. It is clear this review failed to identify and resolve the issues in these proceedings.
ASIC also alleges MSAL failed to correctly report Regulatory Data for 633,680 orders submitted to the Market Operator between 16 November 2022 and 21 March 2023.
