Westpac is holding crisis talks with its largest institutional investors as legal action over allegations by the money-laundering regulator that the bank breached laws more than 23m times ignited investigations by a raft of other corporate and financial regulators.

Shares in the nation’s second biggest bank continued to slide on Monday – down a further 1% to $24.50 at midday in a rising market – and credit ratings agency Moody’s issued a report saying the events unfolding were “ratings negative”.

The bank will also likely face a spate of class actions, with the first expected to be brought by law firm Phi Finney McDonald on behalf of shareholders.

Last Wednesday, Australia’s financial intelligence agency, Austrac, launched legal action against Westpac, accusing it of more than 23m breaches of anti-money laundering and counter-terrorism finance laws involving $11bn in transactions, including transfers potentially linked to child exploitation.

The case is likely to lead to fines in excess of $1bn. Commonwealth Bank has already agreed to a $700m fine as a result of failures to properly oversee the use of its ATM machines in breach of money-laundering controls. But its case involved just 53,000 breaches, compared with 23m for Westpac.

Westpac now faces further investigations, which could impact directly on the bank’s directors and senior executives.