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23 June 2017 - Macquarie Securities fined A$505,000
Macquarie Securities
Source - http://www.smh.com.au/business/markets/macquarie-securities-fined-505000-for-reckless-trades-20170623-gwx3vj.html
Where - Australia
Cost - 505,000 AUD
Business line - Retail Brokerage

Macquarie Securities (Australia) has paid a penalty of A$505,000 to comply with an infringement notice given to it by ASIC’s Markets Disciplinary Panel (MDP) after "reckless" trading with a client it suspected of share price manipulation.

Accoriding to ASIC, in 2014, Macquarie on-boarded a client with a business model that represented a “departure from Macquarie's traditional client base”, so the firm customised the parameters of its concurrent bid/offer filter on its AOP system.

Macquarie’s trade surveillance monitoring software raised alerts about a substantial number of orders entered in the system and the firm’s trade surveillance team sent an internal memorandum to management about the issue. But management chose to wait before suspending or terminating the client’s account. Macquarie’s management had considered lodging a suspicious activity report (SAR), but this was never finalised.

The MDP claims Macquarie contravened Market Integrity Rules because it was aware of the trading and rather than adopt measures to minimise the risk, its decision to customise the parameters of the concurrent bid/offer filter “created a more fertile environment for a possible breach.”

The MDP branded Macquarie’s conduct as “reckless,” especially considering it continued to allow trading for 39 days after a “reasonable market participant in the same position as Macquarie” would have likely suspended the client’s account.

“The key organisational failure was the inexplicable delay of Macquarie’s management in completing the SAR and further failing to temporarily suspend the account until it was satisfied that it was meeting its obligations under the market integrity rules,” said the MDP.