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Australia : Macquarie Bank Limited pays $175,000 infringement notice penalty.

Macquarie Bank Limited (Macquarie) has paid a penalty of $175,000 to comply with an infringement notice given to it by the Markets Disciplinary Panel (MDP). The penalty was for failing on two separate occasions, to deposit a total of $23 million (being $14 million and $9 million respectively), received from a Client into Client Accounts maintained by Macquarie and designated as Clients' segregated accounts.

Background and circumstances

The MDP was satisfied that:

On 3 October 2012, Macquarie re-opened a Client Account (Account B) for a Client (Macquarie Client). Macquarie failed to designate Account B as a segregated Client Account.

On 8 October 2012, Macquarie set up further Client Accounts for the Macquarie Client by cloning Account B. The cloning of Account B resulted in the establishment of another Client Account (Account A) for the Macquarie Client. Macquarie failed to designate Account A as a segregated Client Account.

On 10 October 2012, Macquarie received $14 million from the Macquarie Client intended for Account A, but which was deposited by Macquarie into the Macquarie non-segregated House Account (Contravention 1).

On 11 October 2012, Macquarie received $9 million from the Macquarie Client intended for Account B, but which was deposited by Macquarie into the Macquarie non-segregated House Account (Contravention 2).

On 12 October 2012, Macquarie's failure to designate Account A as a segregated Client Account was identified and corrected. Notwithstanding this, Macquarie made no enquires to establish whether the Macquarie Client's money had been affected by the failure to designate Account A as a segregated Client Account on 8 October 2012.

On 15 October 2012, Macquarie's failure to designate Account B as a segregated Client Account was identified and corrected. Notwithstanding this, Macquarie made no enquires to establish whether the Macquarie Client's money had been affected by the failure to designate Account B as a segregated Client Account on 3 October 2012.

On 17 October 2012, Macquarie's futures division enquired with Macquarie's finance division about a $23 million movement from non-segregated House Accounts to segregated Client Accounts in the futures balance sheet. The explanation provided was that the error resulted from the redesignation of Account A and Account B to segregated Client Accounts on 12 and 15 October 2012 respectively. Notwithstanding this, Macquarie made no enquiries to establish whether the Macquarie Client's money had been affected by the failure to designate Account B and Account A as segregated Client Accounts on 3 and 8 October 2012 respectively.

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Publication:Mena Report
Date:Dec 18, 2013
Words:418
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