In November last year, the UK Financial Conduct Authority (FCA) fined Macquarie Group £13 million ($27 million) for “serious failings” in allowing a junior trader to record more than 400 fictitious trades over nearly two years in a bid to hide large trading losses.
The FCA castigated Macquarie for “significant weaknesses” in systems and controls, including some the bank had known about but failed to fix.
Even though Macquarie self-reported the rogue trader, it was a significant blow to the legendary “loose/tight” culture at the bank, where innovation and adventure is encouraged but HQ’s risk controls protect the franchise.
Now, the Australian Securities and Investments Commission (ASIC) has dealt an even more damaging blow to that legendary status, casting doubt on how such an increasingly complex institution can be properly governed and manage operational risk.
