The Australian Securities and Investments Commission (ASIC) said Wednesday that Macquarie Bank has been hit with a record fine of $4.995 million by the Markets Disciplinary Panel (MDP) for failing to prevent suspicious orders from being placed on the electricity futures market.
Macquarie Bank Fined Record $4.995 Million By ASIC For ‘Serious’ Gatekeeper Failure
ASIC revealed it found that Macquarie had breached market integrity rules on 50 occasions between January and September 2022, allowing three of its clients to place orders that displayed characteristics of an intention to “mark the close.”
This involves placing orders within the last minute of market close to influence the daily settlement price in a direction favorable to the client’s existing position.
ASIC Chair Joe Longo criticized Macquarie for its repeated failures to detect and prevent suspicious trading activity.
“The record penalty imposed by the MDP reflects the serious, prolonged and potential systemic failures by Macquarie to detect and prevent suspected manipulation in the ASX 24 market for energy derivatives,” he said. “Given its role as a gatekeeper, it must ensure suspicious orders are not permitted to be placed on our markets.”
ASIC said it contacted Macquarie on six separate occasions to alert it to concerns about volatility in energy markets or suspicious trading by Macquarie’s clients.
The MDP found that Macquarie’s failure to respond to ASIC’s concerns about suspicious trading activity was an “aggravating factor in determining the size of the penalty.”
The bank was also criticized for failing to appreciate the seriousness of its obligations as a market participant and for deficiencies in its surveillance system.
The fine is the highest ever imposed by the MDP and reflects the seriousness of Macquarie’s misconduct. It is also part of a broader crackdown by ASIC on market manipulation in energy and commodities derivatives markets.
