The Federal Court has found Macquarie Investment Management Investment Management in breach of the Corporations Act and its Australian Financial Services Licence following a critical failure to monitor the now-collapsed Shield Master Trust.
In a hearing held on March 20, Justice Michael Wheelahan ruled that Macquarie failed to act "efficiently, honestly, and fairly" by allowing superannuation members to continue investing in the high-risk trust despite internal red flags.
The court heard that under its own investment governance framework, Macquarie should have placed Shield on its internal watch list by March 1, 2022.
Instead, the fund was added to conservative, balanced, and growth investment menus for over a year.
During this period, which lasted until 5 June 2023, the court found Macquarie failed to conduct any additional due diligence, performance reporting, or necessary follow-up actions to protect member capital.
"At all times between March 1, 2022 and June 5, 2023, the defendant failed to do all things necessary to ensure the financial services covered by its AFSL were provided efficiently, honestly, and fairly," Justice Wheelahan stated.
The failure to trigger its own risk management protocols constituted a contravention of federal financial services law.
The Australian Securities and Investments Commission, which spearheaded the investigation, successfully argued that Macquarie's oversight was fundamentally inadequate.
The court has ordered Macquarie to pay ASIC’s legal costs, marking a significant win for regulatory accountability in the Australian superannuation sector.