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Macquarie to repay $321m following Shield failings
The super fund trustee will fully remediate all of its members the entirety of what they had invested in the Shield Master Fund, admitting to contraventions of the Corporations Act.
On Thursday morning, the Australian Securities and Investments Commission announced that Macquarie Investment Management Ltd (MIML) has committed to paying $321 million to cover the losses of thousands of Australians that invested in Shield through its platform.
ASIC has commenced proceedings in the Federal Court against MIML following admissions that it did not act “efficiently, honestly and fairly by failing to place Shield on a watch list for heightened monitoring”.
The regulator has also accepted a court-enforceable undertaking from Macquarie to ensure it pays members 100 per cent of the amounts they invested in Shield less any amounts withdrawn.
“This is an important outcome that stems from the significant losses that threatened thousands of members’ retirement savings after they used Macquarie’s platform to invest their super in Shield,” said ASIC deputy chair Sarah Court.
“Many members thought their funds were safe when they used Macquarie’s super platform to invest in Shield, which had no track record.
“ASIC’s investigation will see Macquarie return these members to the position they were in before their retirement savings were eroded.”
As superannuation trustee, MIML oversaw approximately $321 million in super investments into Shield by around 3,000 of its members between 2022 and 2023.
Macquarie has admitted the allegations in the proceeding, with the regulator noting it is a “matter for the Court to determine whether the declarations are appropriate”.
ASIC added that it would not seek the imposition of a civil penalty in the “exceptional circumstances of this matter”, citing the strong public interest in obtaining a timely court-based outcome which will encourage other superannuation trustees to comply with their legal obligations in the context of choice platforms.
It also noted that it took into account the interests of providing affected members who invested into Shield through a regulated superannuation fund with certainty in a timely manner and the “level of cooperation demonstrated by Macquarie” in agreeing to pay members without waiting for an outcome of the Shield liquidation or proceedings against other parties involved.
“Superannuation trustees offering choice platforms are on notice. They are gatekeepers for retirement savings. ASIC expects them to take active steps to monitor the funds they make available to members through their platforms,” Court said.
“ASIC is continuing to investigate misconduct relating to the Shield and First Guardian Master Funds to hold those involved to account.”
Macquarie Super members who invested in Shield have not been able to redeem their funds since February 2024 after Keystone Asset Management redemptions.
Last month, ASIC commenced civil penalty proceedings in the Federal Court against Equity Trustees, which oversaw the investment of “around $160 million of retirement savings into Shield over 2023 and 2024 through its fund”.
“Instead of acting as an effective gatekeeper for its members’ retirement savings, ASIC alleges Equity Trustees allowed thousands of members to invest in Shield which had no track record. Those members ultimately saw their super balances eroded,” Court said.
“Superannuation trustees play a critical role helping people save for their retirement. We expect them to do so with care and skill and put the interests of their members first."
“This action should send a clear message to superannuation trustees: proper due diligence is needed when offering investment options for members.”
AUTHOR
Maja Garaca Djurdjevic
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