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Long-awaited CommBank class action kicks off
The trial of one of the largest shareholder class actions in Australian history is set to begin today (7 November) before the Federal Court.
Jess Feyder
The Commonwealth Bank of Australia (CBA) class action was filed in 2017 by Maurice Blackburn Lawyers on behalf of CBA investors who suffered loss due to significant share price falls that arrived off the back of the bank’s alleged misconduct.
When facing AUSTRAC in 2018, CBA conceded that it failed to carry out an appropriate assessment of money laundering and terrorism financing and failed to report suspicious matters on time, or at all, when it became aware of transactions in the tens of millions of dollars.
For this breach, CBA was handed the largest ever civil penalty in Australian corporate history of $700 million.
The class action brought by CBA shareholders alleged that the bank knew about serious instances of non-compliance with the AML/CTF Act and that its failure to disclose information to the ASX meant CBA engaged in misleading and deceptive conduct and was in breach of its continuous disclosure obligations under the Corporations Act 2001 (Cth) and the ASX Listing Rules.
“The AUSTRAC allegations are extensive, and it is astounding that the market would not be advised of such serious and repeated breaches as soon as the company became aware of them,” said Andrew Watson, national head of class actions at Maurice Blackburn.
In 2018, a comparable class action was commenced against CBA by other applicants; the court ordered that the applicants from the two proceedings discuss a joint approach.
In 2019, the court approved the proposal for joint conduct of the litigation and made orders to ensure both proceedings were conducted as a single proceeding.
The class action is being led by executive director Rebecca Gilsenan and principal lawyer Ronald Koo from Maurice Blackburn Lawyers, with financial support from litigation funding giant Omni Bridgeway.
This case follows another shareholder class action against CBA, which alleged the bank failed to adequately disclose its climate change risks in its 2016 annual report.
In 2020, another class action was filed against CBA, with allegations that the bank sold customers junk credit card and personal loan insurance, with hundreds of thousands of CBA customers being represented in the class action.
