Two Macquarie Group executives repeatedly drugged a colleague with valium and laxatives during a business trip to South America in a "malicious" attempt to discredit him.
Within hours of the dangerous prank, several photographs of the unconscious man had been emailed from Chile to Australia, where they were circulated among Macquarie stockbrokers in Melbourne and Sydney.
![The unconscious victim.](http://web.archive.org./web/20170622230807im_/https://www.fairfaxstatic.com.au/content/dam/images/g/w/v/x/0/g/image.related.articleLeadwide.620x349.gwvb8e.png/1498049326565.jpg)
A senior executive involved in the drugging also sent an image of the South American-branded laxative that was secretly administered to his colleague at an upmarket restaurant in the Chilean capital Santiago.
The 49-year-old victim has launched legal action against the investment bank known as the "millionaires factory", which was aware of the extraordinary allegations, but did not take disciplinary action against the perpetrators.
Fairfax Media can reveal Macquarie's then divisional director Michael Rosenbaum and investment adviser Stefan Whiting repeatedly spiked the drinks of a colleague as they travelled across Brazil and Chile to inspect gold mines owned by Cleveland Mining Company.
The drugging is believed to have occurred between June 1 and June 10, 2011.
It was revealed on Wednesday that Cleveland managing director David Mendelawitz had reported three Macquarie staff, including Mr Rosenbaum and Mr Whiting, to the corporate regulator over alleged misconduct between 2011 and 2012.
'Bad behaviour'
Mr Mendelawitz, who travelled with the Macquarie executives in South America, confirmed he witnessed Mr Whiting administering drugs to another investment adviser.
![Seafood restaurant Peurto Marisko in Las Condes, Santiago, Chile where the victim was drugged.](http://web.archive.org./web/20170622230807im_/https://www.fairfaxstatic.com.au/content/dam/images/g/w/v/d/w/u/image.related.articleLeadwide.620x349.gwvb8e.png/1498049326565.jpg)
He said he was willing to sign a statutory declaration if required.
"It was amateur hour. We were trying to represent Macquarie to our partners in South America as the best and brightest, but they kept behaving like complete dickheads. I was naive, and I certainly wouldn't accept this kind of behaviour now," Mr Mendelawitz said.
![Former Macquarie Bank investment advisers Stefan Whiting, left, and Michael Rosenbaum.](http://web.archive.org./web/20170622230807im_/https://www.fairfaxstatic.com.au/content/dam/images/g/w/u/p/5/a/image.related.articleLeadwide.620x349.gwvb8e.png/1498049326565.jpg)
In an email sent on June 10, 2011, Mr Rosenbaum attached several photographs of his unconscious colleague, including an image in which a marker pen was used to draw a moustache on the man's upper lip, and what appears to be a smiley face on his forehead.
In another image, the victim had passed out on a couch.
We were trying to represent Macquarie to our partners in South America as the best and brightest, but they kept behaving like complete dickheads.
Cleveland managing director David Mendelawitz
Mr Rosenbaum, who continues to work in the stockbroking industry, wrote in the email: "...Chilean style, don't fark with me, u end up down the rabbit hole".
Complete mess
Mr Mendelawitz said he first became aware of the dangerous prank as they boarded a plane in the coastal of town of La Serena, about 470 kilometres north of the Chilean capital Santiago.
![Former Macquarie adviser Stefan Whiting.](http://web.archive.org./web/20170622230807im_/https://www.fairfaxstatic.com.au/content/dam/images/g/w/u/y/j/k/image.related.articleLeadwide.620x349.gwvb8e.png/1498049326565.jpg)
"He was a complete mess, he passed out on the plane".
After arriving in Santiago, they headed to seafood restaurant, Puerto Marisko.
![Cleveland Mining Group managing director David Mendelawitz.](http://web.archive.org./web/20170622230807im_/https://www.fairfaxstatic.com.au/content/dam/images/g/w/u/1/l/4/image.related.articleLeadNarrow.300x0.gwvb8e.png/1498049326565.jpg)
According to Mr Mendelawitz, more valium was slipped into drinks as they dined at the restaurant, before a bottle of Ducolax liquid laxative was purchased at a local pharmacy.
After passing out again, the victim is believed to have been taken back to the Time Apartments in Las Condes. He was wrapped in a bed cover and left in the room.
"It was malicious. Everyone was having a few drinks. They were certainly trying to cut him out of the picture and discredit him in front of me," Mr Mendelawitz said.
He regrets not speaking up at the time, but said he felt "powerless to act".
"I was never a chief executive before, and I couldn't believe what was going on. When you see your share price going up, everyone's happy, but I couldn't believe their behaviour as individuals," Mr Mendelawitz said.
Complaint made
Upon their return to Australia, a representative of Macquarie's human resources department is understood to have discussed the incident with the victim, who was removed from the Cleveland account in July 2011.
No action was taken by Macquarie management against Mr Rosenbaum or Mr Whiting, who would become key players in the sharp rise and dramatic collapse of Cleveland's share price in 2012.
Maurice Blackburn has filed a statement of claim on behalf of the victim.
"During the course of the Plaintiff's employment with the Defendant, the Defendant, its servants or agents, drugged, assaulted, humiliated, abused and harassed the Plaintiff, causing the production, aggravation, acceleration and/or recurrence of the Plaintiff's injury," according to the statement of claim.
The victim is seeking compensation for loss of income and medical costs.
Mr Rosenbaum and Mr Whiting did not respond to questions, but issued threats against Fairfax Media via their lawyers.
Legal action looms
A Macquarie spokeswoman also declined to answer questions, but released the following statement.
"Macquarie treats any allegations regarding inappropriate or potentially illegal behaviour with the utmost seriousness, regardless of their source. Where matters are raised, Macquarie conducts a thorough investigation and where appropriate, notifies relevant authorities," the spokeswoman said.
Macquarie is facing legal action on several fronts, at a time when the banking sector is attempting to persuade the Turnbull government and regulators it has its shop in order. Cleveland made an announcement this week to the Australian Stock Exchange that Melbourne firm Macpherson Kelley Lawyers is preparing a class action against Macquarie on behalf of disgruntled investors in the Perth-based company.
A wealthy Ballarat businessman, who lost $4 million investing in Cleveland, has already lodged a writ in the Supreme Court of Victoria, after funding a three-year private investigation of Macquarie and several senior executives.
Separate proceedings have also been launched with the Financial Ombudsman Service.