The Australian Securities and Investments Commission (ASIC) initiated legal action in the Federal Court against MIML, a division of the Macquarie investment bank, due to lapses in efficiency, honesty, and fairness; specifically, its failure to monitor Shield appropriately by not putting it on a watch list.

The regulatory body accepted a legally enforceable agreement from MIML, committing Macquarie to reimburse members the full amount they invested in Shield, minus any funds already withdrawn.

Under the terms of the enforceable undertaking, Macquarie must pay the funds to affected customers by September 30.

ASIC stated that, as the trustee managing superannuation, Macquarie Investment Management Ltd was responsible for overseeing approximately $321 million funneled into Shield by about 3000 members between 2022 and 2023.

ASIC deputy chair Sarah Court emphasized that their inquiry ensures Macquarie restores the financial position of these members to what it was before their retirement savings were impacted.

“This crucial resolution curtails the extensive losses impacting thousands of members’ retirement funds, which occurred after they used Macquarie’s platform to invest their superannuation in Shield,” she commented.

“Many members thought their funds were safe when they used Macquarie’s super platform to invest in Shield, which had no track record.”

The payments will be made in full by next Tuesday.

Under the agreement, ASIC is not seeking civil penalties against MIML, despite admitting it breached the law.

The corporate watchdog said this was in recognition of the level of cooperation demonstrated by Macquarie in agreeing to pay members 100 per cent of the amounts invested in Shield less any amounts withdrawn, without waiting for an outcome of the Shield liquidation or proceedings against other parties involved.

Macquarie Group said its 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,” the bank said.