Australian regulator sues Macquarie Bank over withdrawals from customer accounts

Australia's securities regulator commenced civil penalty proceedings in the Federal Court against Macquarie Bank Ltd. for failing to monitor and control transactions by third parties, including financial advisers, on customers' cash management accounts.

The Australian Securities and Investments Commission, or ASIC, said April 5 that the impact on Macquarie Bank's customers includes A$2.9 million in unauthorized withdrawals by former financial adviser Ross Andrew Hopkins. ASIC Deputy Chair Sarah Court said the financial adviser misused the lender's systems by processing transactions using his fee authority to steal client funds.

The regulator alleged that between May 1, 2016, and Jan. 15, 2020, the lender did not take adequate measures to prevent these types of transactions, which used a bulk transacting system and were outside the scope of the authority given by customers.

In a same-day release, Macquarie Bank said it has cooperated with the investigation and fully reimbursed the 13 clients of the independent financial adviser that was involved in fraudulent activities. The lender also noted that it continues to introduce new controls and processes to respond to evolving threats.

ASIC is seeking declarations, pecuniary penalties and other relief from the court, including an independent probe of Macquarie Bank's fee authorities and fee transactions through the bulk transacting system.

The Federal Court is yet to set the date for the first case management hearing.