Macquarie Group Ltd (ASX: MQG) has agreed to fully compensate investors who saw $321 million of their retirement savings disappear in the collapse of the Shield Master Fund last year.
The Australian Securities and Investments Commission (ASIC) said on Thursday that Macquarie Investment Management "has committed to paying thousands of Australians who invested hundreds of millions in retirement savings in the Shield Master Fund and has admitted it contravened the Corporations Act''.
The commitment from Macquarie covers about 3000 investors who put money into the Shield Master Fund between 2022 and 2023, ASIC said.
ASIC Deputy Chair Sarah Court said it was 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''.
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.
ASIC said it had decided not to seek a civil penalty as part of the agreement with Macquarie, given the company's level of cooperation and the strong public interest in obtaining a timely outcome.
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Cooperation in the interests of investors
Macquarie said the commitment it has made, "will eliminate the necessity for investors to wait for a likely complex multi-year process as Shield liquidators Alvarez & Marsal continue to pursue recovery of funds''.
In a Federal Court proceeding commenced by ASIC, a Macquarie subsidiary, Macquarie Investment Management Limited (MIML) will admit to a contravention of its obligation to provide financial services efficiently, honestly and fairly. Macquarie's decision to devote resources to achieve this outcome recognises Shield's unique circumstances, notably the scale of the issue, its material impact on many investors and their limited access to recourse from the many different entities which played a role. The approach of providing immediate certainty and an improved outcome for investors benefits all parties.
To facilitate the payments, Macquarie will purchase investors' holdings in Shield at the current fair value and also make a goodwill payment to investors, with the two amounts equal to 100% of the net capital each client invested in Shield.
The payments will be made by September 30.
