CBA Admits Some Claims, Denies Others in Money Laundering Case

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  • Admits it was late in filing suspicious-transaction reports
  • ‘Deeply regrets’ failure to comply with Australian law

Commonwealth Bank of Australia admitted it was late in submitting suspicious-transaction reports but will contest many of the other charges made by Australia’s financial-crimes regulator, according to its defense against money laundering allegations filed in the Federal Court in Sydney Wednesday.

The Sydney-based bank said it failed to adequately check on money laundering and terrorism financing risks when it installed a new range of automated teller machines in 2012. But it denied that constituted eight separate violations of Australian law.

“We take our anti-money laundering and counter-terrorism financing obligations extremely seriously,” Commonwealth Bank said in a statement to the ASX. “We deeply regret any failure to comply with these obligations.”

Financial crimes agency Austrac is suing the bank over 53,700 alleged breaches of anti-money laundering and counter-terrorism financing laws. Commonwealth Bank failed to monitor suspected money laundering even after being alerted by law enforcement agencies, Austrac claimed in court filings on Aug. 3. 

CBA also admitted to some charges concerning suspicious-matter reports and allegations it didn’t conduct adequate customer due diligence. But it denied many of the individual claims made by Austrac, and said that should be reflected in any judgment made by the Australian court.

“CBA accepts that it would be appropriate for the court to make declarations of contravention insofar as these are admitted and to impose a pecuniary penalty,” the bank’s defense said. But for the purposes of the penalty, the admitted contraventions “should be treated as single courses of conduct,” the defense said.

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The claims follow a string of scandals for Australia’s largest banks, ranging from poor financial advice for wealth management customers to allegations of manipulating the bank-bill swap rate. Lawmakers last month ordered a yearlong, wide-ranging public inquiry into the conduct of Australia’s banks, financial-services providers and pension funds.

Since Austrac launched its civil lawsuit in August, regulators have opened two additional probes and a class action lawsuit has been filed. Commonwealth Bank shares have fallen 4.7 percent. Chief Executive Officer Ian Narev in August said he would leave the bank next year.

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