Macquarie Bank’s Negligence Costs Customers Millions

ASIC has commenced civil penalty proceedings against Macquarie Bank Ltd in the Federal Court. Amongst other claims, ASIC alleges that Macquarie failed to adequately monitor and control transactions by third parties, such as financial advisers, on their customers’ cash management accounts.

ASIC also alleges that:

• There was limited monitoring by Macquarie of transactions made through its bulk transaction system using a ‘fee authority’
• Transactions did not pass through a fraud monitoring system or undergo manual checks to confirm the transactions were for fees.
• Macquarie failed to take measures to prevent or detect transactions made using its bulk transacting system that was outside the scope of a ‘fee authority’ given by a customer, including misappropriating and attempts to misappropriate customer funds.
• Macquarie breached its obligations as a financial services provider to ensure its financial services were provided efficiently, honestly and fairly.
• Macquarie made false or misleading representations in the promotion and offering of limited third-party access over cash management accounts.
• When a customer gave ‘fee authority’ to a third party, Macquarie represented that it would check that any transaction made under the ‘fee authority’ was actually for fees, when it did not.

It is alleged that because of Macquaries’ inadequate monitoring, an estimated $2.9 million in unauthorised withdrawals were made by a now-convicted former financial adviser, Ross Andrew Hopkins.

Sarah Court, Deputy Chair of ASIC said, ‘Mr Hopkins misused Macquarie’s systems by processing transactions using his fee authority to steal client funds. Macquarie failed to properly detect and prevent these unauthorised fee transactions, many of which were over $10,000 each. Mr Hopkins’ conduct is an example of what can go wrong when banks do not properly monitor their systems and implement appropriate processes.

However, she also noted that ‘ASIC’s case is not focused on Mr Hopkins’ conduct but rather on alleged multiple failures by Macquarie to take proper steps to monitor, detect and prevent unauthorised transactions,’ concluded Ms Court.

ASIC is seeking declarations, pecuniary penalties and other relief from the Court, including a compliance order for an independent review of Macquarie’s fee authorities and fee transactions using its bulk transaction system to ensure recommendations regarding improvements are effectively implemented.

From December 2021, Macquarie remediated Mr Hopkins’ clients approximately $3.5 million on an ex-gratia basis.

Macquarie Bank Dispute Legal Help

If you are a current or former client of either Macquarie Bank or Ross Andrew Hopkins, we would like to hear from you. Have a different bank dispute case you’d like to discuss with us? We are uniquely experienced in the interconnection of the financial and legal sectors and can help you navigate the bank dispute process from start to finish.  

You can tell us about your experience on 1300 433 533 or email us at enquiry@fdlegal.com.au. We are committed to ensuring our clients receive the best possible advice and guidance on their situation, especially in financial matters.