Macquarie Bank fined $10m over failure to monitor unauthorised withdrawals
Make us a preferred source
Make us a preferred source on Google
The news: Macquarie Bank has been fined $10 million for failing to have effective controls to prevent and detect unauthorised fee transactions by third parties on customer cash management accounts using the bank’s build transacting facility.
The numbers: The fine followed a judgement by the Federal Court after the Australian Securities and Investments Commission (ASIC) took the bank to court in 2022.
ASIC found that between October 2016 and October 2019, a financial adviser was able to withdraw fraudulently around $2.9 million from his customers’ account without being detected by Macquarie.
The context: ASIC said Macquarie enabled customers to give third parties such as financial advisers, stockbrokers and accountants, different levels of authority to transact on their accounts, including a limited authority to withdraw the third party’s fees.
It noted that Macquarie also made available to third parties a bulk transacting tool to make multiple withdrawals across multiple customer accounts simultaneously. However, the bank failed to monitor whether third-party bulk transactions under the fee authority were actually for fees.
What they said: ASIC chair Joe Longo said: “Fraud controls are increasingly important and this case sends an important message to financial institutions and other financial service licensees that they must have appropriate controls in place.
“Macquarie fell short of its obligation to do all things necessary to provide its financial services efficiently, honestly and fairly and as a result it has become liable for a substantial penalty.”
The source: ASIC media release
