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CBA denies most claims in expanded money laundering suit

Commonwealth Bank of Australia denied most of the additional 100 claims of breaches filed by Australia's anti-money laundering regulator and all allegations of liability in a shareholder class action.

Of the 100 additional allegations in the Australian Transaction Reports and Analysis Centre's, or AUSTRAC, amended statement of claim, the bank denied 89 of them in full and admitted to 11 in part, according to a Feb. 23 release.

AUSTRAC filed fresh claims in December 2017 over 53,800 breaches of the country's Anti-Money Laundering and Counter-Terrorism Financing Act. The regulator alleged that CBA failed to report suspicious matters on time or at all, among other things. AUSTRAC filed a civil suit against CBA in August 2017 for allegedly breaching the Act on more than 53,700 occasions. The claims involve the bank's "smart" ATM facilities, which customers can use to deposit and transfer cash anonymously.

Responding to the additional claims, CBA agreed it did not meet risk assessment requirements for its intelligent ATMs but disagreed it led to 14 separate contraventions. The bank also agreed its transaction monitoring did not work as intended with regard to some accounts between October 2012 and October 2015.

The bank further admitted to filing late 53 suspicious matter reports, or SMRs, and that another 45 reports should have been filed, but denied 132 claims over SMRs. Based on AUSTRAC's claims, CBA broke 230 of its SMR obligations.

CBA also admitted, wholly or partly, to 56 claims of breaches of ongoing customer due diligence requirements but denied a further 53 allegations.

With regard to the shareholder class action started by Zonia Holdings Pty. Ltd., CBA categorically denied all allegations of liability. The action alleges CBA failed to disclose, between July 1, 2015, and Aug. 3, 2017, material information related to the AUSTRAC proceedings. The suit also claims the bank failed to disclose potential exposure to AUSTRAC enforcement action.

CBA said it complied at all times with its continuous disclosure obligations. It added AUSTRAC had not disclosed to the bank before Aug. 3, 2017, any decision to take action against it, or the number or nature of its claims.