Law firm Maurice Blackburn Lawyers has united with Australia’s largest litigation funder IMF Bentham to pursue the largest Australian Securities Exchange (ASX) listed company, Commonwealth Bank of Australia (CBA).
The potential class action announced by Maurice Blackburn and IMF Bentham today, looms as the largest shareholder class action the country has seen.
CBA’s 800,000-odd registered shareholders suffered a significant share price drop on the back of news that Australia’s financial intelligence and regulatory agency, AUSTRAC, had initiated legal proceedings against the CBA alleging serious and systemic non-compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).
Online registrations are now open for aggrieved shareholders who purchased ordinary CBA shares during the period from 17 August 2015 to 3 August 2017 and still held some or all of those shares on until after 1pm on 3 August 2017.
“AUSTRAC alleges that CBA contravened the AML/CTF Act on more than 53,000 occasions. The AUSTRAC allegations are extensive and it is astounding that the market would not be advised of such serious and repeated breaches as soon as the company became aware of them,” National Head of Class Actions at Maurice Blackburn, Andrew Watson said.
“Instead the CBA has said that its Board was aware of the breaches in the second half of 2015 but chose to say nothing to the ASX until 4 August 2017.
“As the largest company on the ASX shareholders would expect the CBA to take a leadership role in setting high standards of corporate conduct. The AUSTRAC allegations, if proven, show an abject failure of corporate governance and risk management. The failure to make proper disclosure to the market regarding those failures adds insult to injury for shareholders.”
After news of the AUSTRAC legal proceedings became public, CBA shares dropped from an intra-day high of $84.69 on 3 August 2017 to an opening price of $80.11 on 7 August 2017, a significant movement for an otherwise stable stock.
“Our investigations and analysis show that this drop was in the top one per cent of price movements that CBA experienced in the past five years, making it apparent that the news was of material significance to shareholders,” Mr Watson said.
Hugh McLernon, Director of IMF Bentham, said that from today, shareholders could register their claims on the IMF website as work is finalised by the solicitors and counsel on the Federal Court pleading to commence the class action.
“CBA is facing most serious allegations from AUSTRAC, and there are serious questions to be answered about what the company knew and when,” Mr McLernon said.
In a statement today released to the ASX, CBA noted that is has not been severed with any legal proceedings:
Commonwealth Bank statement regarding potential shareholder class action
Wednesday, 23 August 2017 (Sydney): We are aware that Maurice Blackburn and IMF Bentham announced today that they are investigating a potential shareholder class action against Commonwealth Bank.
Commonwealth Bank has not been served with any legal proceedings.
We will keep the market informed of developments.