ASIC says it’s also investigating the Commonwealth Bank

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Corporate regulator ASIC (Australian Securities and Investments Commission) has confirmed it is investigating the Commonwealth Bank over its conduct in the money laundering scandal.

ASIC is looking at whether there have been breaches of the Corporations Act.

The regulator wants to know whether officers and directors at CBA complied with their duties, whether the company met continuous disclosure obligations, whether the CBA acted honestly, fairly and efficiently, and whether the bank met its financial reporting obligations, including contingent liabilities.

Following an investigation by the the financial intelligence and regulatory agency, AUSTRAC, the Commonwealth Bank last week was taken to the Federal Court for alleged breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act involving combined cash deposits of $624.7 million.

“Given that Austrac’s matters are before the court I cannot comment on the specifics of that,” ASIC chair Greg Medcraft told a joint parliamentary committee hearing today.

“However, I would like to inform the committee that ASIC has commenced inquiries into this matter and any consequences this matter has for the laws we administer.”

This week the bank’s board of directors axed short term bonuses for CEO Ian Narev and his senior executives.

Catherine Livingstone, chair of the CBA, said: “The board’s actions reflect the focus we are taking on improving the trust among people, customers, businesses and communities that the Bank exists to serve.”

The actions of senior managers in the money-laundering scandal who run compliance are also under scrutiny. The bank’s board of directors says it is taking a look at “management accountability”, either by action or omission.

Livingstone says the bank now has a dedicated sub-committee of four directors to oversee the response to AUSTRAC’s statement of claim and a program of action.

This week the bank posted a 4.6% increase in full year cash profit to $9.88 billion and a 7.6% surge in net profit after tax to $9.93 billion.