ASIC sues Macquarie 兔子先生for systemic misleading conduct
14 May 2025 Australia
Image: jone/stock.adobe.com
The Australian 兔子先生and Investments Commission (ASIC) is suing Macquarie 兔子先生(Australia) Limited (MSAL), alleging it engaged in misleading conduct by misreporting millions of short sales to the market operator for over 14 years.
In proceedings filed in the New South Wales Supreme Court, ASIC alleges that between 11 December 2009 and 14 February 2024, MSAL failed to correctly report the volume of short sales by at least 73 million 鈥� this could be between 298 million and 1.5 billion short sales, ASIC estimates.
In its first short sale reporting case, ASIC alleges the misleading conduct was due to multiple systems-related issues, many of which remained undetected for over a decade.
ASIC Chair Joe Longo comments: 鈥淭his action is timely, given significant recent global market volatility.
鈥淎ccurate and reliable data underpins the integrity of, and confidence in, Australia鈥檚 financial markets. Investors expect reliable information to analyse market movements and inform their investment decisions.鈥�
Obligations to report short sales were introduced in 2009, following the global financial crisis.
Short sale data is used to inform governments, regulators, and market participants about market sentiment and potential risks, while also helping to detect market misconduct and supporting market integrity.
The duration of MSAL鈥檚 reporting issues means that it might have failed to comply with these requirements for most, if not all, of the time that these requirements have been in force.
Longo continues: 鈥淢SAL鈥檚 repeated systemic failure to detect and resolve these issues indicated serious neglect of its systems and disregard for operational controls and technological governance.鈥�
This announcement marks the fourth regulatory action ASIC has taken against Macquarie Group in the past 12 months.
On 7 May, ASIC imposed additional AFS licence conditions on Macquarie Bank, following more than 10 years of compliance failures.
In September 2024, ASIC鈥檚 Markets Disciplinary Panel (MDP) fined Macquarie Bank AU$4.995 million (US$3.226 million) for failing to prevent suspicious orders being placed on the electricity futures market.
In April 2024, the Federal Court ordered Macquarie Bank to pay a penalty of AU$10 million for failing to have effective controls to prevent and detect unauthorised fee transactions conducted by third parties on customer cash management accounts using Macquarie鈥檚 bulk transacting facility
鈥淥ur actions reflect the ongoing and deep concerns we have with Macquarie Group and its weak remediation of long-standing issues, which led us to impose additional conditions on Macquarie Bank鈥檚 Australian Financial Services licence only last week,鈥� says Longo.
In 2020, MSAL undertook a review of its short sale reporting process, following weaknesses identified in 2015 and 2019.
According to ASIC, it is clear this review failed to identify and resolve the issues in these proceedings.
The Commission also alleges MSAL failed to correctly report Regulatory Data for 633,680 orders submitted to the Market Operator between 16 November 2022 and 21 March 2023.
In addition to penalties, ASIC is seeking an independent review and assurance of MSAL鈥檚 regulatory reporting systems, controls, and supervisory procedures to ensure compliance with the law.
MSAL is an Australian Financial Services (ASF) licensee and a market participant of both the Australian 兔子先生Exchange (ASX) and Cboe (formerly Chi-X) markets.
Under its licence, it is authorised to deal in securities on behalf of retail and wholesale clients.
AFS licensees are required to report certain details about short sales to market operators, which rely on accurate short sale information to publish daily aggregated short sale reports to the market.
ASIC alleges that MSAL鈥檚 misreporting impacted data relating to at least 321 unique securities.
The Commission also alleges that for each impacted security, MSAL inflated or deflated the published volume of short sales by an average of approximately 12 per cent, with several instances of misreporting impacting the published short sale volume by 50 per cent or more.
MSAL is a subsidiary of Macquarie Group Limited, which recorded a net profit of AU$3,715 million in its 2025 annual report.
In proceedings filed in the New South Wales Supreme Court, ASIC alleges that between 11 December 2009 and 14 February 2024, MSAL failed to correctly report the volume of short sales by at least 73 million 鈥� this could be between 298 million and 1.5 billion short sales, ASIC estimates.
In its first short sale reporting case, ASIC alleges the misleading conduct was due to multiple systems-related issues, many of which remained undetected for over a decade.
ASIC Chair Joe Longo comments: 鈥淭his action is timely, given significant recent global market volatility.
鈥淎ccurate and reliable data underpins the integrity of, and confidence in, Australia鈥檚 financial markets. Investors expect reliable information to analyse market movements and inform their investment decisions.鈥�
Obligations to report short sales were introduced in 2009, following the global financial crisis.
Short sale data is used to inform governments, regulators, and market participants about market sentiment and potential risks, while also helping to detect market misconduct and supporting market integrity.
The duration of MSAL鈥檚 reporting issues means that it might have failed to comply with these requirements for most, if not all, of the time that these requirements have been in force.
Longo continues: 鈥淢SAL鈥檚 repeated systemic failure to detect and resolve these issues indicated serious neglect of its systems and disregard for operational controls and technological governance.鈥�
This announcement marks the fourth regulatory action ASIC has taken against Macquarie Group in the past 12 months.
On 7 May, ASIC imposed additional AFS licence conditions on Macquarie Bank, following more than 10 years of compliance failures.
In September 2024, ASIC鈥檚 Markets Disciplinary Panel (MDP) fined Macquarie Bank AU$4.995 million (US$3.226 million) for failing to prevent suspicious orders being placed on the electricity futures market.
In April 2024, the Federal Court ordered Macquarie Bank to pay a penalty of AU$10 million for failing to have effective controls to prevent and detect unauthorised fee transactions conducted by third parties on customer cash management accounts using Macquarie鈥檚 bulk transacting facility
鈥淥ur actions reflect the ongoing and deep concerns we have with Macquarie Group and its weak remediation of long-standing issues, which led us to impose additional conditions on Macquarie Bank鈥檚 Australian Financial Services licence only last week,鈥� says Longo.
In 2020, MSAL undertook a review of its short sale reporting process, following weaknesses identified in 2015 and 2019.
According to ASIC, it is clear this review failed to identify and resolve the issues in these proceedings.
The Commission also alleges MSAL failed to correctly report Regulatory Data for 633,680 orders submitted to the Market Operator between 16 November 2022 and 21 March 2023.
In addition to penalties, ASIC is seeking an independent review and assurance of MSAL鈥檚 regulatory reporting systems, controls, and supervisory procedures to ensure compliance with the law.
MSAL is an Australian Financial Services (ASF) licensee and a market participant of both the Australian 兔子先生Exchange (ASX) and Cboe (formerly Chi-X) markets.
Under its licence, it is authorised to deal in securities on behalf of retail and wholesale clients.
AFS licensees are required to report certain details about short sales to market operators, which rely on accurate short sale information to publish daily aggregated short sale reports to the market.
ASIC alleges that MSAL鈥檚 misreporting impacted data relating to at least 321 unique securities.
The Commission also alleges that for each impacted security, MSAL inflated or deflated the published volume of short sales by an average of approximately 12 per cent, with several instances of misreporting impacting the published short sale volume by 50 per cent or more.
MSAL is a subsidiary of Macquarie Group Limited, which recorded a net profit of AU$3,715 million in its 2025 annual report.
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