Macquarie Group Ltd.'s head of banking, Greg Ward, said the company has been threatened with a class-action lawsuit over allegations that some of its brokers and advisers manipulated the stock prices of Cleveland Mining Co. Ltd. or failed to act on clients' instructions over the stock's price movement.
During a Feb. 22 parliamentary hearing in Melbourne, a number of Cleveland Mining investors and executives claimed that certain Macquarie personnel inflated the stock price of Cleveland Mining through false or misleading statements to sell cheaply purchased stocks at a higher price, Bloomberg News reported. No case has been filed yet.
One person at the hearing claimed to have lost A$4 million due to Macquarie brokers' advice on the stock.
Macquarie has denied the allegations. Ward said the company had investigated and found that the allegations were "unsubstantiated."
According to the report, Cleveland Mining shares traded around 35 Australian cents until early 2012 and then jumped to 90 cents in April of the same year. The company's shares plunged in 2016 and were voluntarily suspended in October of the same year when they were trading at 7 cents.