The Australian Securities and Investments Commission (ASIC) has initiated legal proceedings against Macquarie Securities (Australia) Limited (MSAL), the broking division of the investment bank Macquarie. The lawsuit, filed in the NSW Supreme Court, alleges that MSAL misled the market by inaccurately reporting millions of short sales over a span of 14 years. This marks ASIC’s fourth regulatory action against Macquarie within just over a year.
The regulatory body claims that MSAL failed to accurately report the volume of short sales to the market operator from December 2009 until February 2024. ASIC’s allegations suggest that the misleading reporting stemmed from various unaddressed systemic issues, many of which persisted for over a decade.
Short sale reporting requirements were introduced in 2009 as a response to the Global Financial Crisis, aiming to enhance market transparency and protect its integrity. This data is vital for stakeholders, including investors and regulators, as it provides insights into market sentiment and potential risks, while also helping detect market misconduct.
In response to the allegations, Macquarie stated that its securities division had already identified issues with daily short sale reporting and informed ASIC of these concerns in late 2022. Subsequently, the company uncovered additional related issues, which were also disclosed to the regulator. Macquarie emphasised that it has since rectified the reporting problems and implemented further controls to prevent recurrence. The bank is currently analysing ASIC’s claims, asserting its commitment to compliance and regulatory obligations.