ASIC suing Macquarie Securities over long-standing misreporting

The Australian Securities and Investments Commission (ASIC) has announced it is suing Macquarie Securities Limited alleging the company engaged in misleading conduct by misreporting millions of short sales to the market operator for over 14 years.

The regulator has noted that the action represents the fourth regulatory move against Macquarie in just over 12 months.

ASIC said it had filed proceedings in the NSW Supreme Court alleging that between 11 December 2009 and 14 February 2024, MSAL 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.

ASIC, in its first short sale reporting case, alleges the misleading conduct was due to multiple systems-related issues, many of which remained undetected for over a decade.

Accurate short sale reporting matters. Obligations to report short sales were introduced in 2009, following the Global Financial Crisis. Short sale data is used to inform investors, governments, regulators and financial market participants about market sentiment and potential risks. It also assists in detecting market misconduct and supports market integrity.

ASIC Chair Joe Longo said, ‘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.

‘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.’

Today’s announcement marks the fourth regulatory action ASIC has taken against Macquarie Group in just over 12 months.