(Reuters) - The Federal Court of Australia has fined Macquarie Bank A$10 million ($6.4 million) for its lack of controls to detect and prevent unauthorised fee transactions carried out by third parties on customer accounts, the securities regulator said on Friday.
The bank allowed customers to give third parties, such as financial advisers and stockbrokers, different levels of transaction authority, including to withdraw fees, the Australian Securities and Investments Commission (ASIC) said in a statement.
Macquarie Bank provided a bulk transacting tool to third parties to make multiple withdrawals across several customer accounts simultaneously.
However, between May 2016 and January 2020, it failed to implement controls to monitor whether third-party bulk transactions under the fee authority were actually for fees.
Macquarie said it acknowledged it had contravened a statutory obligation in this regard.
"While Macquarie implemented effective controls from January 2020, its earlier failures meant that financial adviser Ross Hopkins was able to fraudulently withdraw around A$2.9 million from his customers' accounts without being detected by Macquarie," said Joe Longo, ASIC chair.
Hopkins, who was sentenced to six years imprisonment in 2021 on charges of misappropriating clients' funds, made those transactions using Macquarie Bank's bulk transaction system.
Macquarie Group (OTC:MQBKY), which controls the bank, said it had fully reimbursed the 13 affected clients after the financial adviser's failure to compensate them for their losses. The bank has agreed to pay the fine, the ASIC added. ($1 = 1.5642 Australian dollars)
(This story has been corrected to move paragraph 3 to last paragraph, and to clarify that Macquarie Bank has already reimbursed clients after the adviser's failure, not the bank's, to do so)