The Commonwealth Bank (CBA) has filed its response to the amended Statement of Claim lodged by finance intelligence agency AUSTRAC in December.
In an ASX announcement this morning, CBA denied the majority of new allegations against it.
In August last year, AUSTRAC’s initial Statement of Claim alleged more than 53,700 contraventions of anti-money laundering laws. The regulator then alleged an additional 100 breaches in an amended Statement in December. They mostly involve claims that the bank was either late in reporting suspicious matters, or failed to monitor suspicious activity appropriately.
“In our amended defence in the AUSTRAC matter, we deny the majority of the 100 additional allegations,” CBA said.
“Of the 100 additional allegations in AUSTRAC’s amended statement of claim, CBA denies 89 allegations in full and admits 11 allegations in part.”
The bulk of the 53,700 breaches in the initial claim relate to instances where CBA failed to report suspicious activity on time.
“We agree that we were late in filing 53,506 Threshold Transaction Reports but we will submit that, for the purposes of penalty, these should be treated as a single course of conduct,” CBA said.
Late lodgement of transaction reports carries a penalty of up to $18 million, meaning that in theory the bank could be fined that amount for each late transaction report, adding up to more than $966 billion.
AUSTRAC also said the bank didn’t take steps to assess the risks of intelligent deposit machines (ATMs) until mid-2015, three years after they were introduced.
“We agree that we did not adequately adhere to risk assessment requirements for Intelligent Deposit Machines (IDMs) – but do not accept that this amounted to 14 separate contraventions,” CBA said.
“We agree that our transaction monitoring did not operate as intended in respect of a number of accounts between October 2012 and October 2015.”
In unrelated legal action, a class-action lawsuit was launched against CBA last September on behalf of investors who bought shares in the company between August 17, 2015, and August 3, 2017.
The class-action is based on the allegation that from July 2015 to August 2017, CBA did not adequately disclose that it was under investigation by AUSTRAC.
“CBA rejects the assertion that it had any price sensitive information in respect of its AML/CTF controls environment or the risk of the AUSTRAC proceeding, and maintains that it at all times complied with its continuous disclosure obligations,” the statement said.
“In our defence of the class action matter, we categorically deny all allegations of liability.”
The bank said that prior to August 3, 2017, it had not been informed by AUSTRAC that any action would be taken against it, or about the nature and extent of any breaches that would be alleged.
As part of its half-year results released earlier this month, CBA booked a provision of $375 million for estimated costs associated with the money laundering scandal.