CBA Fails to Disclose AML Non-Compliance to Investors, A Court Hears

Richard Marley

November 08, 2022

A court has heard that the CBA should have informed the market that it may have engaged in “law-breaking on a grand scale” by violating Anti Money Laundering (AML) regulations.

The class action claims that CBA violated its ongoing disclosure requirements by failing to notify the ASX of non-compliance cases that it was aware of several years prior to AUSTRAC’s announcement. The claims of liability have been refuted by CBA, which says that there is no price-sensitive data on the issues raised in the AUSTRAC proceeding that needs to be disclosed to the market.

“The issue is, is this information of the kind that would or would be likely to influence investment decisions? Well, of course, it would. Look at the sheer number of contraventions: 53,506 contraventions is, objectively, a very large number to say the least. It’s law-breaking on a grand scale,” Jeremy Stoljar SC said.

Emails sent between senior bank executives in 2015, according to Stoljar, were “instructive” since they indicated the sensitivity with which the matters had been handled at the time. Investors, he claimed were included in the term stakeholders, would have been worried that CBA had breached money laundering laws over 50,000 times.

Referring to a report in The Australian Financial Review, Jeremy Stoljar said that when the violations were made public, the reaction was “universal and unanimous”.

According to Stoljar, the key issue in the class action was if the details that CBA had delayed in reporting significant transactions to AUSTRAC would be expected to have an impact on investment choices. “The answer is, well, it was law-breaking on a grand scale. Of course, it would,” he said.