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Appeal lodged in CommBank shareholder class action

2 minute read

A dismissed shareholder class action against Commonwealth Bank over its alleged failures to comply with anti-money laundering obligations may get a second chance on appeal.

Philip Anthony Baron and Zonia Holdings, lead applicants in the failed shareholder class action against Commonwealth Bank (CBA), filed notices of appeal with the Federal Court on Tuesday (25 June).

“Commonwealth Bank of Australia acknowledges that an appeal was filed from the Federal Court of Australia judgment in the shareholder class action proceedings today,” the bank said in a statement.

“CBA intends to defend the appeal.”

With support from Omni Bridgeway, the applicants originally alleged CBA traded shares at an “artificially inflated price” because it did not comply with its continuous disclosure obligations and failed to correct defective cleansing notices between June 2014 and August 2017.

It was alleged CBA had information about these contraventions but failed to disclose them on the Australian Securities Exchange (ASX).

This conduct was alleged to have been “misleading or deceptive”.

The crux of the applicant’s shareholder proceedings related to CBA’s $700 million penalty for a 2017 failure to comply with the Anti-Money Laundering and Counter Terrorism Financing Act 2006.

Justice David Yates dismissed the proceedings last month, finding the matter “was such that the court was not satisfied the ASX listing rules required the bank to disclose that information to the ASX”.

“More generally, I am not satisfied that the information, in any of its pleaded forms, was information that a reasonable person would expect to have a material effect on the price or value of CBA shares if that information were to have been generally available at the relevantly pleaded times,” Justice Yates said.

At the time, CBA denied the allegations in a note on the ASX.

Shortly after the proceedings were dismissed, Maurice Blackburn published on its website that the applicants were “carefully considering the judgment, including any possible grounds of appeal”.