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The Commonwealth Bank of Australia (CBA) has acknowledged an appeal filed from the Federal Court of Australia judgment today (25 June) during the shareholder class action proceedings.
The appeal was filed by lead applicants in the failed shareholder class action case against the major bank, Philip Anthony Baron and Zonia Holdings.
The judgment was in relation to allegations that the major bank had breached its continuous disclosure obligations by not disclosing certain material information related to its Anti-Money Laundering and Counter-Terrorism Financing non-compliance.
In 2017, the Australian Transaction Reports and Analysis Centre (AUSTRAC) initiated civil penalty proceedings in the Federal Court against CBA for “serious and systemic non-compliance” with anti-money laundering and counter-terrorism laws.
AUSTRAC also alleged that CBA had made certain misrepresentations to the market.
At first instance, the Federal Court found in CBA’s favour and dismissed the two class actions commenced against the major bank (in 2017 and 2018) on 28 May 2024.
The judgment at first instance (announced on 10 May 2024 by CBA) was handed down by Justice David Yates, who dismissed the charges.
Justice Yates, when speaking on the allegations against CBA, stated that he was satisfied that the major bank was “constructively aware of the IDM ML/TF Risk Assessment Non-Compliance Information pleaded as the August 2015 IDM ML/TF Risk Assessment Non-Compliance Information”.
In an ASX statement, CBA has confirmed that it intends to defend the appeal.
Background on the case
The action from AUSTRAC alleged that CBA had more than 53,700 contraventions of the AML/CTF Act after an investigation conducted by AUSTRAC into the major bank’s compliance, regarding its use of intelligent deposit machines (IDMs) in particular.
AUSTRAC alleged that CBA did not comply with the requirements of its AML/CTF program in relation to monitoring transactions on 778,370 accounts over a period of three years.
CBA had denied 89 of 100 allegations relating to AML/CTF breaches in 2018, however, admitted it was late in filing 53,506 threshold transaction reports.
CBA paid a $700 million penalty in 2018 in order to settle the matter with AUSTRAC.
The class action was filed on 9 October 2017 by Maurice Blackburn Lawyers on behalf of all shareholders affected by the alleged non-disclosure by CBA and was supported by Omni Bridgeway.
In 2020, the Australian Securities and Investment Commission (ASIC) told the major bank that it will not be taking any action in relation to the proceedings.
[RELATED: AUSTRAC class action against CBA dismissed]
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