Phi Finney McDonald acts for its clients in a class action commenced in the Federal Court of Australia against the Commonwealth Bank of Australia (CBA). This case has been issued on behalf of investors who acquired CBA shares between 16 June 2014 and 3 August 2017 (inclusive) (claim period). The class action is being funded by Therium Australia Limited (Therium), and is being run in conjunction with another similar class action.
Background
On 3 August 2017, Australia’s anti-money laundering authority, Austrac, announced that it had commenced proceedings against CBA. Austrac alleged in those proceedings widespread non-compliance by CBA with anti-money laundering and counter-terrorism financing (AML/CTF) requirements.
CBA was aware or should have been aware of its non-compliance with these requirements, from at least June 2014. Despite that, CBA did not disclose any AML/CTF concerns to investors until they were forced to do so by Austrac’s announcement on 3 August. CBA’s share price then fell markedly. A number of enquiries into CBA’s conduct were announced in the wake of the Austrac announcement, including by ASIC and APRA. CBA has since paid a penalty to Austrac of A$700m.
Allegations
The class action alleges that CBA breached its continuous disclosure obligations, and engaged in misleading or deceptive conduct, by failing to inform investors that it had:
- failed to assess the AML/CTF risk posed by “intelligent” deposit machines (IDMs) when launched in May 2012 and for three years thereafter, and that no adequate risk assessment was undertaking during the claim period;
- failed to monitor customer transactions, including potential money laundering and terrorism financing activity, on over 700,000 accounts;
- not reported over 53,000 threshold transactions to Austrac on IDMs on time;
- been contacted by Austrac and other agencies in respect of these and was at risk of enforcement action by AUSTRAC in respect of serious and system non-compliance with AML/CTF obligations.
It is further alleged that CBA’s share price was artificially inflated because of CBA’s conduct as above.
Class Action Registration
Phi Finney McDonald was approached by significant institutional investors to represent them in the CBA class action, and to source competitive funding arrangements for investors. In April 2018, Phi Finney McDonald announced the proposed class action and invited eligible investors who wished to participate in the class action to register their claims.
Accordingly, on 29 June 2018, the class action was commenced on behalf of investors who acquired CBA shares during the claim period, and who had executed a litigation funding agreement by then.
This case is being run in conjunction with a parallel class action. On 10 July 2019, the Court ordered that the pleadings in the two cases be harmonised, and that the proceedings be case managed together and conducted according to a cooperation protocol.