Macquarie Investment Management Ltd (MIML) will return $321 million to superannuation clients who invested in the Shield Master Fund under a court-enforceable undertaking following legal action instigated by Australian Securities and Investments Commission (ASIC).
The regulator announced that MIML, a subsidiary of Macquarie Group and the superannuation trustee of the Macquarie Superannuation Plan and operator of the Macquarie wrap platform, would return the money to around 3000 people who were invested into Shield between 2022 and 2023.
The amount being returned represents 100 per cent of the amounts invested in Shield, less any amounts withdrawn.
The undertaking is part of proceedings commenced by ASIC in the Federal Court in which MIML admitted it contravened the Corporations Act by not acting efficiently, honestly and fairly by failing to place Shield on a watch list for heightened monitoring.
While MIML has admitted the allegations in the proceeding it still remains a matter for the Court to determine whether the declarations are appropriate.
ASIC stated following the undertaking it had determined not to seek the imposition of a civil penalty noting the ‘exceptional circumstances’ of the matter which includes a “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”.
The regulator also indicated it took into consideration the interests of providing affected members who invested into Shield with certainty and the level of co-operation demonstrated by Macquarie in agreeing to reimburse Shield investors without waiting for an outcome of the Shield liquidation or proceedings against other parties involved.
ASIC deputy chair Sarah Court said: “This is an important outcome that stems the significant losses that threatened thousands of members’ retirement savings after they used Macquarie’s platform to invest their super in Shield.”
“ASIC’s investigation will see Macquarie return these members to the position they were in before their retirement savings were eroded.”
Financial Advice Association Australia general manager of policy, advocacy and standards Phil Anderson described the announcement as great news for those invested in Shield through the Macquarie super platform.
“Seemingly Macquarie will reimburse them and then take on the uncertainty with respect to whatever recoveries can be made through the liquidation. We welcome Macquarie taking this action,” Anderson said.
“This is a very good outcome for these clients who have been so badly impacted by the collapse of this managed investment scheme.
“We also recognise the efforts of ASIC to negotiate this outcome and appreciate that it will place pressure on the other super funds to take similar action.”
