AUSTRAC has expanded its case against the Commonwealth Bank with 100 more allegations of anti-money laundering and counter-terrorism funding law contraventions, bringing the number to “over 53,800”.
The amended statement of claim alleges a further six contraventions of intelligent deposit machine risk management obligations, 38 contraventions of ongoing customer due diligence obligations and 56 contraventions of suspicious matter reporting obligations.
AUSTRAC chief executive Nicole Rose said the additional 100 alleged contraventions were identified after the regulator instituted civil penalty proceedings against the bank.
“These allegations are very serious and reflect systemic non-compliance over approximately six years,” Ms Rose said.
In a statement to the ASX, the Commonwealth Bank said it will “review the amended statement of claim and update the market as appropriate”, adding it will file an updated defence “in due course”.
The bank lodged its initial defence on Thursday, refuting a number of the claims and noting that AUSTRAC intended to lodge an amended statement.
The bank said it had commenced a program in 2015 to “significantly upgrade” its compliance operations with regard to anti-money laundering and counter-terrorism financing regulation, and had continued in the last 12 months.
“During 2017, we have stepped up the rigour and intensity of the program and extended it across all aspects of financial crime obligations and all business units to further strengthen regulatory compliance,” the bank said.
A Morningstar report on the bank, released on Friday 15 December, stated there was "no real surprises" in CBA's response to AUSTRAC.
"The bank goes to great lengths to defend its position and highlight its active and extensive working relationships with AUSTRAC and other law enforcement agencies over a long period of time," it said.
"But relationships with AUSTRAC must be strained."
In the last eight years, the bank had spent more than 400 million on anti-money laundering and counter-terrorism financing compliance, and indeed the bank's defence to AUSTRAC contained details undertaken by the bank since 2015 to address and strengthen financial crime compliance.
However, CBA could suffer reputational damage from the combined effects of the AUSTRAC case as well as the royal commission, the report indicated.
"News of the additional AUSTRAC claims and potential negativity from the forthcoming royal commission increase uncertainty around Commonwealth Bank for the next 12-18 months," it said.
The report also cited speculation that CBA's fine "could be at least AUD 500 million", which represented only five per cent of CBA's profit of $9,928 million for the financial year ending 30 June 2017.
Australia’s ETF industry continues to thrive despite the sharemarket decline with $3.9 billion in value traded according to a review by Be...
There are growing calls for a financial sector-wide code that “consolidates” conduct regulation and self-regulation in the industry. ...
A new emerging companies fund is a natural progression for equities investment manager DNR Capital, which has typically stuck to larger comp...