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Shareholders launch class action against Commonwealth Bank

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Federal Court proceedings have been issued in the shareholder class action against Commonwealth Bank.

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Law firm Maurice Blackburn said a statement of claim filed in the Victorian Federal Court names outgoing chief executive Ian Narev and current chair Catherine Livingstone as among those who knew CBA had been accused of breaching anti-money laundering and counter-terrorism funding laws.

Litigation funder IMF Bentham said its funding of the class action – which centres on the lender’s failure to promptly disclose the 2015 allegations to the market – is now unconditional.

Maurice Blackburn national head of class actions Andrew Watson said that when CBA did reveal the issues to the market this year, the result was a significant drop for an otherwise stable stock.

“Our investigations and analysis show that this drop was in the top one per cent of price movements that CBA experienced in the past five years, so clearly the news was of material significance to shareholders,” Mr Watson said in a statement.

IMF said the start of the class action claim period has been extended by more than six weeks and is now open to those who purchased CBA shares between July 1, 2015 and August 3, 2017.

Registrations for the class action, which has the potential to be the largest in the history of Australia, opened last month.

Maurice Blackburn alleges 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.

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.

CBA shares were 50 cents (0.66 per cent) higher at $76.80 at 11:27am AEDT.

– AAP

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