News: MQG UPDATE 1-Australia fines Macquarie Bank $6.4 mln for not preventing unlawful third-party...

(Updates with detail on Macquarie Bank's failure, regulator comments, and context)

April 19 (Reuters) - The Federal Court of Australia has fined Macquarie Bank A$10 million ($6.4 million) for its lack of controls to detect and prevent unauthorised fee transactions carried out by third parties on customer accounts, the securities regulator said on Friday.

The bank allowed customers to give third parties, such as financial advisers and stockbrokers, different levels of transaction authority, including to withdraw fees, the Australian Securities and Investments Commission (ASIC) said in a statement.

Macquarie Bank, a unit of financial conglomerate Macquarie Group (MQG) , also provided a bulk transacting tool to third parties to make multiple withdrawals across several customer accounts simultaneously.

However, between May 2016 and January 2020, Macquarie Bank failed to implement controls to monitor whether third-party bulk transactions under the fee authority were actually for fees.

"While Macquarie implemented effective controls from January 2020, its earlier failures meant that financial adviser Ross Hopkins was able to fraudulently withdraw around A$2.9 million from his customers' accounts without being detected by Macquarie," said Joe Longo, ASIC chair.

Hopkins, who was sentenced to six years imprisonment in 2021 on charges of misappropriating clients' funds, made those transactions using Macquarie Bank's bulk transaction system.

Macquarie Bank has agreed to pay the fine, the regulator said.

($1 = 1.5642 Australian dollars)