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

The claim is brought on behalf of investors (group members) who, between 30 June 2014 and 19 November 2019 inclusive (Claim Period), acquired an interest in shares traded on the Australian Securities Exchange (ASX) and/or the New Zealand Stock Exchange, American Depository Receipts (ADRs) traded on the New York Stock Exchange, and/or long exposure equity swaps (together, Westpac Securities). The class action is funded by Woodsford Group Limited (Woodsford).

Frequently Asked Questions

If you have a question about the class action, please read the FAQ available at the link here: Answers to Frequently Asked Questions for Group Members

Registration of Interest

If you acquired Westpac securities between 30 June 2014 and 19 November 2019 (inclusive) 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.

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 Westpac had (or was at risk of having):

  1. contravened its obligation to report millions of IFTIs to AUSTRAC;
  2. engaged in serious and systemic non-compliance with the AML/CTF Act in various respects; and
  3. failed to monitor its customers properly for known indicators of child exploitation,

and that it was exposed to losses from this conduct including the imposition of substantial fines and/or significant remediation costs.

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

  1. it had in place effective procedures and systems designed to ensure compliance with relevant regulatory requirements (including the AML/CTF Act);
  2. it was in fact in compliance, or in substantial compliance, with AML/CTF requirements;
  3. to the extent it had identified necessary improvements to AML/CTF policies and systems, this was due to an environment of ongoing legislative reform, regulatory change and increased industry focus, rather than due to any systemic flaws or deficiencies in Westpac’s AML/CTF policies and systems or in its compliance with its AML/CTF obligations;
  4. to the extent it had reported IFTI failures:
    • it was otherwise in compliance, or in substantial compliance, with its AML/CTF obligations; and
    • those failures did not give rise to any significant ML/TF risk and were less serious than those matters giving rise to AUSTRAC’s civil penalty proceeding against CBA.

The class action alleges that Westpac’s share price was artificially inflated because of the above conduct, and that investors who acquired an interest in 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. Second Amended Statement of Claim, dated 1 December 2023
  3. Westpac’s Defence to Amended Statement of Claim, dated 10 July 2020
  4. Answers to Frequently Asked Questions for Group Members