Macquarie Denies Claims Its Brokers Manipulated Mining Stock


Date: 22.02.2018

Macquarie Group Ltd. has denied allegations that some of its brokers and wealth advisers manipulated stock prices or failed to act on client instructions regarding the collapse of Cleveland Mining Co. shares.

 Disgruntled investors and Cleveland Mining executives alleged at a parliamentary hearing in Melbourne on Thursday that some of Macquarie’s wealth advisers ran a “pump and dump” operation on the stock. One witness claimed he lost A$4 million ($3.1 million) after Macquarie brokers directed him to the shares despite his conservative risk profile.

“We have taken the allegations made with the utmost seriousness and have investigated them thoroughly,” Greg Ward, Macquarie’s head of banking, said at the hearing. “Having investigated the allegations, we are satisfied they are unsubstantiated.” 

Macquarie said it had been threatened with a class action lawsuit over the allegations, but no case had yet been filed.

Shares in Cleveland Mining, a small Western Australian company founded in 2009, traded around 35 cents until early 2012, before spiking to over 90 cents that April. The shares then fell sharply before they were voluntarily suspended in October 2016, when they were trading at 7 cents.

Senior Macquarie executives appeared at the Senate committee “with factual evidence that responds to allegations relating to a class action being pursued by lawyers,” the bank said in a statement Thursday.

“While there has been extensive media coverage of the lawyers’ allegations, litigation is yet to commence,” Macquarie said. “We have responded to the lawyers’ concerns where they were specified and otherwise invited them on a number of occasions to provide details to Macquarie and the appropriate regulators in support of their allegations. They have not done so.”

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