The Australian Securities and Investments Commission (ASIC) has initiated legal proceedings against Macquarie Group, one of Australia’s largest financial institutions with a market capitalization of approximately $82 billion.

The lawsuit, filed in the New South Wales Supreme Court, alleges that Macquarie engaged in misleading conduct by failing to accurately report between 298 million and 1.5 billion short sales over a span of 15 years, specifically from December 2009 to February 2023. The allegations stem from a failure to report at least 73 million short sales.

ASIC Chairman Joe Longo emphasized that the action reflects ongoing concerns regarding Macquarie Group's handling of long-standing issues related to compliance.

He noted that these problems led ASIC to place additional conditions on Macquarie Bank’s Australian Financial Services licence just a week prior.

Short selling involves trading that anticipates declines in stock prices to generate profit.

Notably, Macquarie’s alleged lapses occurred during a period in which the firm was previously protected by ASIC from short-selling activities targeting financial stocks as a result of the 2008 financial crisis recovery, despite being permitted to short non-financial stocks.

This case marks ASIC’s inaugural instance of enforcement concerning short-sale reporting.

According to ASIC, the misleading conduct is attributed to several systemic issues that went undetected for over ten years, indicating a significant neglect of operational controls and technological governance by Macquarie.

This lawsuit is the fourth regulatory action brought against Macquarie Group within the last year.

Prior legal actions included criticisms from ASIC regarding 'multiple and significant' compliance failures, which compelled Macquarie to engage an independent expert for a review of its futures dealings and over-the-counter derivatives trade reporting.

Additionally, Macquarie faced a record fine of $4.9 million from ASIC’s markets disciplinary panel for not preventing suspicious order placements in the electricity futures market as recently as September 2024.

In its latest financial results, Macquarie reported a profit of $3.7 billion for the year, while Chief Executive Shemara Wikramanayake’s compensation decreased from $25.3 million to $24 million.

Macquarie has stated that it self-reported the short-sale reporting issue to ASIC in late 2022 upon discovering the problem and is currently reviewing the regulator’s claims.

A spokesperson from Macquarie confirmed the firm's commitment to compliance and ongoing investments to enhance its systems and controls, but noted that further comments on the matter would be inappropriate given its litigation status.