ATM case stirs big CBA sell-off

THE Commonwealth Bank has suffered a $5.6 billion slide in share market value as investors ditching the lender after it was accused of more than 53,000 breaches of laws put in place to combat money laundering and terrorism financing.

CBA closed 3.9 per cent lower at $80.72, dragging its market value down to about $139.6 billion.

The Federal Government’s financial intelligence unit, Austrac, on Thursday launched civil proceedings in the Federal Court accusing CBA of systemic failure to comply with anti-money laundering and counter-terrorism financing laws.

“Investors have had the chance to think about the implications of these charges after little reaction to the market yesterday,” CMC Markets chief strategist Ric Spooner said.

“The charges have represented an immediate and sizeable cost to the bank’s shareholders.”

CBA could face a maximum penalty of $18 million for each of the 53,700 contraventions, if found guilty.

Australia’s biggest lender denied doing anything to enable crime and said it was committed to working with law enforcement agencies.

Professor of commercial law at Melbourne university, Ian Ramsay, said that while courts generally did not go for the top end of available penalties, CBA could be at risk of massive fines.

“If the allegations are proven, I think we would expect to see a very significant penalty imposed, because they are so serious,” Prof Ramsay said, adding that it was unusual there had not yet been a settlement.

Austrac claims the bank failed to assess the money laundering and terrorism financing risk of intelligent dep- osit machines — ATMs that accept up to $20,000 in cash transactions — before rolling them out in 2012, and only took its first steps to assess those risks in mid-2015.

There has been significant growth in the use of IDMs since their rollout, with more than $1 billion in cash deposited in May and June 2016 each.

The lender yesterday said it was reviewing Austrac’s claim and would file a statement of defence in due course.

Westpac, ANZ and National Australia Bank were quick to confirm they have co-operated with Austrac in order to meet obligations.