Phi Finney McDonald acts for the representative applicant in a class action against ASX-listed Westpac Banking Corporation (Westpac) commenced in the Federal Court of Australia.

The claim is brought on behalf of investors (group members) who acquired shares traded on the Australian Securities Exchange (ASX) and the New Zealand Stock Exchange, American Depository Receipts (ADRs) traded on the New York Stock Exchange, and long exposure equity swaps, between 16 December 2013 to 19 November 2019 (inclusive) (Claim Period). The class action is funded by Woodsford Litigation Funding (Woodsford).

Frequently Asked Questions

If you have a question about the class action generally, whether you are a group member, the Opt Out Notice, or the process for opting out, please read the FAQ here: Link to Westpac FAQs

Registration

If you acquired Westpac securities between 16 December 2013 and 19 November 2019 (inclusive), please email westpac@pfm.law to register and obtain more information about the class action.

Background

On 20 November 2019, it was announced that the Australian Transaction Reports and Analysis Centre (AUSTRAC) had commenced civil proceedings against Westpac in relation to a substantial number of serious contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act). These contraventions included failing to:

  1. conduct risk proscribed assessments of correspondent bank relationships to identify money laundering and crime financing (ML/TF) risk;
  2. report to AUSTRAC approximately 20 million international funds transfer instructions (IFTI) necessary for agencies to scrutinise and identify ML/TF conduct;
  3. pass on to other entities in funds transfer chains, origin data for their own review purposes;
  4. adopt and maintain an appropriate program to address ML/TF risk;
  5. retain records for 7 years of certain foreign transactions; and
  6. monitor customers (including those potentially engaging in child exploitation) and apply enhanced due diligence where warranted by ML/TF risk.

Following the release of this information, between the close of trade on 19 November 2019 and the close of trade on 22 November 2019, Westpac’s share price on the ASX fell approximately 7%

Allegations

The class action alleges that Westpac breached its obligations of continuous disclosure of material information, by failing to advise the market that:

  1. Westpac had systemic faults and failures in identifying ML/TF risk and there was serious and systemic non-compliance with the AML/CTF Act;
  2. Westpac’s serious non-compliance with its ML/TF obligations included the failure to monitor certain customers transacting on accounts in a manner generally accepted to be indicative of child exploitation; and
  3. Westpac was potentially exposed to enforcement action by AUSTRAC in respect of its serious and systemic non-compliance with the AML/CTF Act, which might result in Westpac being ordered to pay a substantial civil penalty.

The class action also alleges that Westpac engaged in misleading and deceptive conduct by representing to the market that:

  1. Westpac had effective policies, procedures and systems in place for ensuring compliance with the ML/TF law, and that it was in fact in compliance with that law;
  2. to the extent it had identified improvements required for compliance with ML/TF law, this was not due to systemic flaws or deficiencies by Westpac, and that Westpac had publicly disclosed all matters relating to the IFTI failures relevant to any AUSTRAC action; and
  3. Westpac had policies, procedures and systems in place to ensure material information was disclosed to the ASX and NZX, and that it had complied with its continuous disclosure obligations.

The class action alleges that Westpac’s share price was artificially inflated because of the above conduct, and that investors who acquired Westpac shares or ADRs or exposure to Westpac shares through equity swaps during the Claim Period suffered loss by paying inflated prices for those acquisitions.

Key Documents

The following documents may be accessed by clicking the links below:

1. Amended Originating Application, dated 12 May 2020

2. Amended Statement of Claim, dated 12 May 2020

3. Westpac’s Defence to Amended Statement of Claim, dated 10 July 2020

4. Orders of the Honourable Justice Middleton (regarding opt-out notice and process), dated 2 June 2021

5. Opt Out Notice, issued 30 June 2021

Registration of Interest

If you acquired Westpac securities between 16 December 2013 and 19 November 2019 (inclusive) and are not opting out of the class action, and you wish to be kept informed regarding developments in the class action, please click here – http://phifinneymcdonald.com/register-interest/ – to sign up to receive email updates from Phi Finney McDonald.