Funder secured for CBA class action

Trevor Chappell | 05 Sep 2017

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MELBOURNE - [AAP] Litigation funder IMF Bentham has confirmed it will back a shareholder class action against Commonwealth Bank (ASX: CBA) related to alleged breaches of anti-money laundering and counter-terrorism funding laws.

IMF and law firm Maurice Blackburn said in August they were considering pursuing a case against CBA, which had the potential to be the largest ever launched in Australia.

IMF said on Tuesday it has now formally decided to fund the case, and is taking registrations from interested CBA shareholders.

The proposed class action will consist of CBA shareholders who purchased shares between August 17, 2015 and August 3, 2017, and who held some of those shares through to 1300 AEST on the latter date, IMF said.

The claim will allege CBA breached its continuous disclosure obligations, and made misleading and deceptive public statements claiming performance of its obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act.

Maurice Blackburn has said CBA knew about its potential breaches of anti-money laundering and counter-terrorism financing laws in 2015 but only told the stock exchange in August this year after the financial intelligence and regulatory agency took civil action against the bank.

AUSTRAC is accusing CBA of more than 53,500 contraventions, most of them related to the bank's use of intelligent deposit machines (IDMs)--ATMs that accept cash and cheque deposits which are immediately credited to the nominated recipient.

AUSTRAC claims the bank failed to assess the money laundering and terror financing risk of the machines before they were rolled out, and to provide on time 53,506 reports of IDM transactions of $10,000 or more.

The lender is also accused of failing to report suspicious matters involving $77 million worth of transactions, either on time or at all.

In a Federal Court hearing on Monday, CBA was given three months to build its defence against the allegations.

AUSTRAC has until March to file a response to CBA's defence before the case returns to the court for another case management hearing in April 2018.

The Australian Securities and Investments Commission is also looking into whether CBA complied with its duties under the Corporations Act, including continuous disclosure obligations. The bank is also facing an inquiry into its governance, culture and accountability by the Australian Prudential Regulation Authority.

CBA shares were up 4 cents at $74.45 at 1145 AEST.

 

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