Commbank faces huge class action
The nation's largest bank, Commonwealth Bank is facing the country's largest ever shareholder class action over a share price rout in the wake of explosive money laundering allegations.
Earlier this month, Austrac, the Australian Transaction Reports and Analysis Centre, accused the bank of more than 53,000 breaches of anti-money laundering and counter-terrorism financing laws.
The bank has blamed the breaches on a single IT error because they related to cash deposited by money laundering syndicates into CommBank ATMs then sent overseas.
Law firm Maurice Blackburn has teamed up with litigation funder IMF Bentham to pursue CommBank in a potential class action on behalf of the 800,000 shareholders who got a share price drop of about 5% after the allegations were made public.
Maurice Blackburn alleges the bank breached its continuous disclosure obligations by failing to inform the market when the issue came to light in 2015.
"Our investigations and analysis show that this drop was in the top 1% of price movements that CBA experienced in the past five years, making it apparent that the news was of material significance to shareholders,” Maurice Blackburn national head of class actions Andrew Watson said in a statement.
The scandal prompted the resignation of chief executive Ian Narev, and the bank stripped all executive bonuses to demonstrate "collective accountability”.
CommBank earlier this month posted a record profit of $9.9 billion, its eighth record result in a row.
- Frank Chung