From Domainfax:
The Commonwealth Bank faces a potential investor class action over its disclosure of more than 53,000 alleged breaches of anti-money laundering laws, following a sharp fall in its share price when the scandal emerged earlier this month.
Plaintiff law firm Maurice Blackburn and litigation funder IMF Bentham on Tuesday said it would investigate a potential class action on behalf of CBA shareholders, citing the hit to the bank’s share price. Maurice Blackburn said it was “astounding” the bank did not tell investors about the alleged breaches earlier.
Austrac chief executive Peter Clark says the court action against the Commonwealth Bank is the first of its kind.
The law firm said it could be the largest shareholder class action in Australian history.
The action is focused on how the bank disclosed allegations that it failed to properly report or monitor suspicious transactions, and that its ATMs were used by criminal gangs to wash millions of dollars.
IMF Bentham said it was investigating claims relating to alleged misleading or deceptive conduct by the bank, and alleged breaches by the bank of its continuous disclosure obligations, relating to Austrac’s legal action against the bank.
Here ’tis:
Austrac earlier this month claimed CBA had failed to report 53,506 transactions to the agency and had its intelligent deposit machines used by criminal syndicates to wash drug money through the bank, which had failed to monitor the suspicious transactions.
“Six of those relate to cash transactions by five customers with respect to whom the bank has assessed have a potential link to terrorism financing,” Mr Clark said today.
The admission stands in contrasts to the claims of the now-outgoing chief executive Ian Narev, who has strongly denied any of the questionable transactions have been linked to terrorism.
Mr Clark also confirmed CBA staff had knowledge of the investigation before it was served with the court claim.
“I can’t talk to what Commbank knew at any particular time,” Mr Clark said. “We have had quite a lot of contact with CBA in respect to this.”
When asked by Greens Senator Peter Whish-Wilson whether the board was aware of the investigation before the claim was filed in court, Mr Clark said he was “not in a position to respond to that, particularly given that proceedings (had commenced)”.
CBA chair Catherine Livingstone has maintained that, while the board knew about the problems with the ATMs in 2015, the first it knew about the legal action was when Austrac filed earlier this month. Austrac first became aware of the issue with the ATMs in September 2015, Mr Clark said.
Well, oh dear. The damages bill is rising daily:
