Australian law firm Phi Finney McDonald has filed a class action against Westpac on behalf of shareholders relating to the bank’s failure to disclose issues relating to its monitoring of financial crime, reported the Australian Financial Review

The class action follows AUSTRAC‘s allegations, revealed in November, the Westpac breached AML/CTF laws 23 million times.

The plaintiff alleges Westpac deceived investors by failing to disclose the extent of AUSTRAC‘s risk management concerns, and is seeking damages on behalf of institutional and retail investors who bought shares in the bank between 16 December 2013 and 19 November 2019.

“Phi Finney McDonald has been approached by institutional investors from across the world who are outraged by Westpac’s alleged conduct,” said Tim Finney, a director at the law firm.

“The governance issues raised in this case are extremely serious, and the losses caused to our clients are substantial.”

The class action will rest on whether Westpac breached its continuous disclosure obligations and engaged in misleading and deceptive conduct by failing to properly inform prospective investors.

The suit alleges that Westpac failed to adequately assess the AML/CTF risks associated with its international transfer platforms, to undertake appropriate due diligence on customers linked to child exploitation, and to report matters in a timely fashion to regulators.

Between the release of AUSTRAC‘s statement of claim on 20 November and the AGM on 12 December, Westpac lost more than AUD 8 billion (USD 5.5 billion) in shareholder value.

Westpac said it will be defending against the claims, arguing that it has consistently disclosed the potential of an AML/CTF compliance matter in its 2018 and 2019 annual reports, in line with its obligations.

Phi Finney McDonald also has separate shareholder actions underway against the CBA and AMP, partly over misconduct uncovered by Royal Commission.