A class action relating to the money laundering scandal at the Commonwealth Bank is going ahead.
Litigation funder IMF Bentham Limited says the action will consist of shareholders who bought shares between August 17, 2015, and August 3, 2017.
The claim will allege breaches by CBA of its continuous disclosure obligations as well as misleading and deceptive public statements.
CBA’s 800,000 shareholders suffered a share price drop on the back of news that Australia’s financial intelligence and regulatory agency, AUSTRAC, had started legal proceedings alleging non-compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.
The bank’s shares dropped from an intra-day high of $84.69 on August 3 to an opening price of $80.11 on August 7.
Class action lawyers Maurice Blackburn said: “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.”
The lawyers claim the board of directors of the CBA was aware of the money-laundering breaches in the second half of 2015, but chose to say nothing to the ASX until August 2017.
The anti-money laundering regulation breaches are said to involve combined cash deposits of $624.7 million.
The civil proceedings follow an investigation by AUSTRAC into the use of intelligent deposit machines which, it is claimed, became the outlet of choice for criminal syndicates to shift offshore cash from drug deals.
Corporate regulator ASIC (Australian Securities and Investments Commission) has also confirmed it is investigating the bank over its conduct in the money laundering scandal.
And the banking regulator, APRA (Australian Prudential Regulation Authority) is investigating governance, culture and accountability at Australia’s biggest company.
A committee of the bank’s board of directors was set up earlier this month to oversee the bank’s response to AUSTRAC’s statement of claim. The committee members are Mary Padbury, bank chair Catherine Livingstone, Brian Long and Shirish Apte.