Class action funder, IMF Bentham has confirmed it will fund a Federal Court open class action against the Commonwealth Bank relating to those allegations that Australia’s biggest bank breached anti-money laundering and counter terrorism funding laws.
The action will consist of CBA shareholders who purchased shares between August 17, 2015 and August 3 2017 and who held some of those shares until 1pm on the latter date, IMF says.
August 3 is when Austrac revealed its sensational claims against the cBA involving nearly 54,000 breaches of money laundering and anti terror laws.
IMF and Maurice Blackburn Lawyers said last month they were considering pursuing a possible case against CBA and on Tuesday IMF said it was now taking registrations.
The news maintained the downward pressure on the CBA share price and it dipped another 0.4% yesterday before a late bounce saw the price rise 0.2% to $74.59 – still down 12.2% from the most recent high of $84.54 reached on August 1.
That is a fall of almost $16 billion in the CBA’s market value
That impacts not only the bank’s 800,000 Australian shareholders, but also every Australian with retirement super through funds large and small (self administered, industry, for profit or corporate). Yesterday’s close of $74.07 is the lowest since last November.
With the Australian stockmarket only 0.4% above its close at the end of 2016, the slump in CBA shares, if it persists will be a major factor in the weak performance of super fund in calendar 2017.
US markets are up around 10.6% since the start of the year. Millions of Australians will be needlessly poorer temporarily because of the incompetent handling of the Austrac claims by the board and senior management.
And the pressure will continue well into 2018 according to Monday’s timeline in the Federal Court for the hearing. The CBA will file its defence by mid December – just before the Christmas-New Year break – then Austrac will file its response by next March with another procedural hearing set down for April which should then set out a time table for the actual hearing. Once that is finished later in 2018 and a decision given, there will likely be an appeal either way (unless there is a negotiated settlement).
APRA’s independent inquiry (but funds by the CBA) will report by next February, and will be another source of bad publicity. The cBA reports its interim figures next February, but will have to get through its 2016-17 AGM in Sydney on November 16.
The bank will be asked questions at the meeting and will likely deflect them saying the matter is before the courts/an inquiry and the board and executives cannot speak. Given the destruction of value, that will not pacify shareholders.
