Some accounts were managed under a discontinued Absolute Return Mortgage-Backed Securities strategy, though the funds carried broader mandates. Macquarie’s US mutual funds and exchange-traded funds account for 75% of its fund assets under management.
Along with charges of improper cross-trading, the settlement found the trades favored some clients over others, primarily to the detriment of the funds. It also noted that disclosures by Macquarie were false and misleading, and the firm had failed to implement appropriate policies and procedures. The offenses took place between January 2017 and April 2021, at which time Macquarie shut down the strategy as the SEC began its investigation. As part of the settlement, Macquarie agrees to pay roughly USD 80 million in penalties, disgorgement, and interest.
Although the offenses occurred more than three years ago, the findings indicate flaws in compliance and breaches of fiduciary duty to clients. While Morningstar continues its diligence on the situation, Macquarie maintains an Average Parent rating.
United States