Macquarie Bank to defend ASIC action

Macquarie Bank Limited (Macquarie) notes the statement released today by the Australian Securities and Investments Commission (ASIC) regarding commencing legal proceedings in relation to Storm Financial (Storm).

As indicated in its release of 26 November 2010, Macquarie remains disappointed that ASIC has chosen to commence litigation.  Macquarie maintains that its conduct, and that of its staff, has been ethical, lawful and professional.

Macquarie will be defending the legal proceedings and continues to believe that ASIC’s action is unsustainable and speculative.

There is a fundamental difference between the role of a margin lender and that of Storm, a financial adviser licensed by ASIC.

Macquarie has been responding under its established dispute resolution process to any complaints made by Storm-advised clients who had margin loan facilities with Macquarie.

Important facts regarding Storm:

• Storm and its financial advisers provided clients with financial advice;
• Storm held an Australian financial services licence (AFSL) which ASIC issued in 2003 and amended in 2007 to expand the scope of Storm’s authorisations;
• Macquarie did not provide personal financial advice to Storm clients;
• Macquarie was one of a number of margin lenders whom Storm advisers and their clients selected;
• Macquarie did not provide home mortgages through Storm; and
• Macquarie did not pay any fees or trailing commissions to Storm on the margin loans.