Macquarie Bank has acknowledged the move by the corporate regulator which has been accused of “failing to adequately monitor and control transactions by third parties, such as financial advisers, on their customers’ cash management accounts”.
On Tuesday, 5 April, 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 million of his clients’ funds.
In its own statement, Macquarie said that it has cooperated with ASIC’s investigation.
“ASIC’s court filing notes that this issue arose in relation to 13 clients of an independent financial adviser between 2016 and 2019, who has since pleaded guilty to fraud. Following the independent adviser’s failure to compensate his clients for their losses, Macquarie fully reimbursed the 13 clients,” the statement read.
“Macquarie treats the security of its clients’ accounts with the utmost seriousness, and has continued to introduce new controls and processes to respond to the evolving external fraud environment.”
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.
The date for the first case management hearing is yet to be confirmed by the Court.
Let me get this correct – an Adviser stole money from Macquarie Bank accounts of his client and of course didn’t pay it back. So the bank paid it back to help the clients. ASIC ban the Adviser but then they go after the Bank who paid back the clients? Why in God’s name? One would think they did far more than they morally or ethically were expected or required to already. This sounds like ASIC simply trying to raise revenue and get another scalp to tick their internal boxes, meet the KPIs of their legal counsel and claim they’re protecting consumers. Where were they when the big 4 ripped off billions? What happened? A few advisers banned, financial reimbursement of clients and nothing more.
When is ASIC going to spend their enormous taxpayer-funded budget on prosecuting or banning actual bad apples who defraud and deceive clients, instead of Advisers who do their best but trip up with administrative issues/errors or tardiness or worse – follow instructions from their Dealer Groups?
When is ASIC going to prosecute industry fund execs who dabbled in insider trading to the detriment of their members portfolios. I imagine that was probably worth more than $2.9m.
Just to clarify, I assume the insider trading you refer to is the moving funds from their unlisted investments to cash at the start of Covid before they were revalued.
If this is is the case, then I agree, ASIC should be looking into it. However, also note that it wasn’t limited to the Industry Fund execs as others like CFS were also included.
Also don’t think it is relevant to compare what these people did with someone who blatantly stole money from individual clients.
Personally, I think this is bigger than what these individuals did, as people in these positions should have limits on how/when they are able to move funds, just as office holders of public companies can’t sell their shares just prior to a bad announcement.