Funder secured for CBA class action

Trevor Chappell | 05 Sep 2017

Page 1 of 1

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.


AAP logo image

© [2017] Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

This report appeared on 2018 Morningstar Australasia Pty Limited

© 2018 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written content of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO"). The article is current as at date of publication.