Macquarie Securities ordered to pay $35m for misreporting short sales
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The news: The New South Wales Supreme Court has ordered Macquarie Securities (MSAL) to pay a $35 million fine after the court found multiple systems-related failures, which caused the misreporting of tens of millions of short sales over several years.
The context: The court found that MSAL failed to correctly report at least 73 million short sales between 11 December 2009 and 14 February 2024, with between 298 million and 1.5 billion transactions misreported over the period.
The inaccurate reporting was attributed to significant technical deficiencies in MSAL’s systems, many of which remained undetected for more than a decade despite numerous internal reviews.
In addition to the pecuniary penalty, the court ordered MSAL to appoint an independent expert to review its short sale and regulatory reporting systems and processes, and to pay costs incurred by the Australian Securities and Investments Commission.
What they said: “MSAL acknowledged that its contravening conduct did result in harm, insofar as it may have impacted both the effective operation of the ASX and the Cboe Australia market, given the various ways in which Short Sale Reports may be used, and the potential for traders, investors, companies, regulators and the general public to be misled by inaccurate data,” Justice Nixon said.
“I am satisfied that a pecuniary penalty in the total amount of $35 million will provide the necessary sting or burden to achieve the objects of specific deterrence and general deterrence,” he added.
The source: ASIC
