On Tuesday, 5 April, ASIC confirmed it had commenced civil penalty proceedings in Federal Court against Macquarie Bank for “failing to adequately monitor and control transactions by third parties, such as financial advisers, on their customers’ cash management accounts”.
ASIC alleged that between 1 May 2016 and 15 January 2020 Macquarie did “limited” monitoring of transactions through its system and that the transactions did not pass through a fraud monitoring or undergo manual checks.
It’s further alleged that the impact on Macquarie customers includes $2.9 million in unauthorised withdrawals by former financial adviser, Ross Andrew Hopkins, who was convicted in May 2021 and permanently banned from providing financial services just months later.
Mr Hopkins, who was an adviser and sole director of QWL Pty Ltd (QWL), was sentenced after he was found to have misappropriated $2,938,750 of his clients’ funds.
Mr Hopkins — who previously pleaded guilty to all charges — misappropriated his clients’ funds over a nearly three-year period (14 October 2016 to 8 October 2019), after he was assigned to manage their self-managed superannuation accounts, and used the funds for his own personal benefit, including holidays, paying rent and paying off his own personal credit cards and loans.
“Mr Hopkins misused Macquarie’s systems by processing transactions using his fee authority to steal client funds. Macquarie failed to properly detect and prevent these unauthorised fee transactions, many of which were over $10,000 each. Mr Hopkins’ conduct is an example of what can go wrong when banks do not properly monitor their systems and implement appropriate processes,” ASIC deputy chair Sarah Court said.
“ASIC’s case is not focused on Mr Hopkins’ conduct but rather on alleged multiple failures by Macquarie to take proper steps to monitor, detect and prevent unauthorised transactions.”
Macquarie is accused of breaching its obligations as a financial services provider and of making false or misleading representations on the promotion or offering of limited third-party access over cash management accounts.
ASIC is seeking declarations, pecuniary penalties and other relief from the Court, including a compliance order for an independent review of Macquarie’s fee authorities and fee transactions using its bulk transaction system to ensure recommendations regarding improvements are effectively implemented.
ASIC has confirmed that from December 2021, Macquarie did remediate Mr Hopkins’ clients $3.5 million on an ex-gratia basis.
The date for the first case management hearing is yet to be confirmed by the Court.
Yet Advisers get handed 3 year bans – effectively a career death sentence – for acting on instructions from their Dealer Groups when ASIC decides they don’t like the look of a document. Seems fair.
Isn’t this typical of ASIC. Where was the regulator since 2016? ASIC is the market reguator, and is not able to monitor the market place, or work with the industry to ensure best practice. So who is going to penalise ASIC for not doing its job … on no Bruno – they get away with it again!
Another classic case of one idiot adviser making life extremely difficult for the 99% of advisers who do nothing wrong.
100%
I don’t quite understand. Macquarie are the most security conscious of all the providers.
How come the theft of $2.9M results in a banning but the $3B that the big licensees had to repay results in a smack on the writst
Because the Banks own the LNP
And Frydenberg & ASIC will not take any AFSL or direct personal attack against the banks.
They just fine the banks cause they can easily pay, they think it looks like a punishment when it’s only the share holders that get penalised. Never make a bank exec pay, be fined or banned.
It’s criminal yet again from ASIC and LNP.
Love an ex gratia
And, no doubt, they will stay “open for business” unlike what would (and has) happened to advisers.