Macquarie Bank fined A$4.995m – September 25, 2024
Macquarie Bank Limited has been fined a record A$4.995m ($3.4m) by the Markets Disciplinary Panel (MDP) for breaching market integrity rules in its role of market gatekeeper.
Macquarie was found to have failed in preventing suspicious orders being placed by three clients on the electricity futures market on 50 different occasions between January and September 2022.
Each order was placed within the last minute of market close, displayed characteristics of an intention to ‘mark the close’, and impacted the daily settlement price. According to the MDP Macquarie should have suspected that “the orders were submitted with the intention of creating a false or misleading appearance in the market.”
The energy market experienced “unprecedented volatility” at the time, which stemmed both from supply issues as well as the Russia and Ukraine war. ASIC had also contacted Macquarie six times about its concerns regarding the volatility in energy markets and suspicious trading by its clients.
Besides failing to respond to the regulators concerns, Macquarie was deemed to have failed to “appreciate the seriousness of its obligations as a Market Participant”, and not having taken full responsibility for its conduct.
This is the highest penalty ever imposed by the MDP. Macquarie did not contest the alleged breaches of Rule 3.1.2(1)(b)(iii) of the ASIC Market Integrity Rules (Futures Markets) 2017, and has complied with the Infringement Notice and paid the fine.
“Macquarie is the largest market participant in energy derivatives and given its role as a gatekeeper, it must ensure suspicious orders are not permitted to be placed on our markets.”
ASIC Chair Joe Longo
Earlier this year Macquarie was also ordered to pay a A$10m ($6.4m) penalty for failing to properly monitor for third-party fee withdrawals from customer accounts.
Cancelled licences of Ultimate Credit Management and Worry Free Finance – September 24, 2024
The Australian credit licences of Ultimate Credit Management Pty Ltd (in liquidation) and Worry Free Finance Pty Ltd have been cancelled following payments of compensation by the Compensation Scheme of Last Resort (CSLR).
The Australian Financial Complaints Authority made determinations against both companies, which both failed to pay. The individuals were then paid by the CSLR (A$500 ($342) and A$22,001 ($15,035)), which also notified the ASIC.
Car dealership sued for alleged unlicensed lending – September 23, 2024
Court proceedings have commenced against Diamond Wheels, Keo Automotive and their former director for allegedly providing unlicensed car loans to consumers who were allegedly denied important protections under the Credit Act.
According to the ASIC Lansvale Motor Group (operated by Diamond Wheels Pty Limited) and Keo Automotive Pty Ltd allegedly offered unlicensed car loans whose terms included almost double the interest lawfully permitted.
Ken Keomanivong is also believed to have been involved in the Credit Act contraventions because he had allegedly arranged and administered the loans for the companies.
“This is the first civil proceeding we have taken to address lending practices by car dealerships.”
Deputy Chair Sarah Court
ASIC seeks declarations, civil penalties and injunctions, including injunctions against Ken Keomanivong to prevent him from participating in further credit activities.
Court updates
A$12.9m greenwashing penalty for Vanguard – September 25, 2024
Vanguard Investments Australia has been ordered to pay a A$12.9 ($8.9m) penalty by the Federal Court for making misleading ESG claims about ESG exclusionary screens. This is the highest penalty to date for greenwashing in Australia.
The screens were applied to investments in the Vanguard Ethically Conscious Global Aggregate Bond Index Fund, and about 74% of the securities in the fund were not researched or did not meet ESG criteria.
The faulty ESG claims were made in multiple various settings, including:
- 12 product disclosure statements;
- A media release;
- Statements on Vanguard’s website;
- A Finance News Network interview on YouTube; and
- A presentation at a Finance News Network Fund Manager Event which was published online.
“Vanguard’s contraventions should be regarded as serious. Vanguard’s misrepresentations concerned the principal distinguishing feature of the Fund, being its “ethical” characteristics.”
Justice O’Bryan
Former Linchpin Capital director’s appeal dismissed – September 25, 2024
An appeal by Peter Daly, a former director of Linchpin Capital Group Ltd (in liquidation), has been dismissed by the Full Federal Court, and the previous Federal Court ruling upheld. That verdict held that Daly:
- was an officer of a responsible entity of a registered managed investment scheme;
- breached his officer’s duties and did not act in the best interests of members; and
- will pay a A$150,000 ($103,223) penalty and be banned from managing a corporation for five years.
ASIC news week 39
Extended and modified reporting instruments
Three legislative instruments that were due to sunset in October have been modified into two instruments. They will cover legislation intended to provide relief from reporting requirements stemming from the reportable situations regime, and to prescribe record keeping requirements for personal advice situations.
The instruments are:
ASIC Corporations and Credit (Breach Reporting–Reportable Situations) Instrument 2024/620; and
ASIC Corporations Record-Keeping Requirements for Australian Financial Services Licensees when Giving Personal Advice) Instrument 2024/508.
Extended Consultation Agreement with FMSB
A two-year extension of the Consultation Agreement with the Financial Markets Standards Board (FMSB) has been made, and will last until September 25, 2026.
The agreement was first signed in September 2022, and the extension will continue to promote global standards. It will also permit the FMSB to further assist ASIC in the development of draft standards and other publications.
Expiring instrument for primary production managed investment schemes
The instrument ASIC Corporations (Land Holding for Primary Production Schemes) Instrument 2024/15 will sunset on October 1. This is a result of the specific requirements for primary production schemes in this instrument no longer being necessary.