Federal Court dismisses disclosure class actions against CBA

1 week ago 5

The Federal Court has dismissed 2 shareholder people actions against the Commonwealth Bank implicit what it told investors astir its compliance with anti-money laundering and counter-terrorism financing (AML/CTF) laws earlier bombshell ineligible enactment was launched against the slope successful 2017.

A landmark lawsuit from regulator AUSTRAC successful 2017 sparked dense falls successful CBA’s stock price, prompting instrumentality steadfast Maurice Blackburn to motorboat a people enactment alleging the slope knew astir large AML/CTF failings successful years earlier the AUSTRAC case, but had failed to decently disclose these to investors.

CBA has had a triumph successful the Federal Court, which dismissed 2 shareholder people actions against the bank.

CBA settled the lawsuit with AUSTRAC successful 2018 for $700 million, which astatine the clip was a grounds firm punishment successful Australia.

Maurice Blackburn’s case, which aboriginal joined with a abstracted people enactment from litigation steadfast Phi Finney McDonald, focused connected what CBA had disclosed to investors earlier AUSTRAC took CBA to court.

The actions alleged that betwixt mid-2014 and erstwhile the AUSTRAC lawsuit was launched successful August 2017, CBA had accusation astir what were aboriginal recovered to beryllium breaches of the AML/CTF laws, and it was claimed CBA had breached its continuous disclosure obligations.

The cases besides claimed that if the accusation astir AML/CTF compliance had been disclosed connected the ASX, it would person had a “material” effect connected CBA’s stock price.

But connected Friday, Federal Court Justice David Yates recovered successful favour of CBA, ruling that adjacent though the slope was alert of problems with its AML/CTF systems earlier AUSTRAC’s 2017 case, it had not breached its continuous disclosure obligations. Justice Yates besides said helium was not satisfied that this information, if it had been released to the market, would beryllium apt to power radical investing successful CBA shares.

Justice Yates besides dismissed claims of misleading and deceptive conduct, which focused connected CBA telling the marketplace it had the policies and systems to comply with regulatory requirements.

Shares successful CBA, which has denied the allegations, had risen 0.8 per cent to $117.99 connected Friday afternoon.

CBA noted the determination successful an ASX announcement connected Friday, portion a spokesperson for Maurice Blackburn signalled the ruling could beryllium appealed. “The ineligible squad volition instrumentality clip to see the determination carefully, with a presumption to an appeal,” helium said.

The allegations against CBA were tested successful a 2022 trial, successful which interior CBA documents were examined and bankers were questioned astir the bank’s adherence to anti-money laundering obligations.

Friday’s ruling comes aft CBA was this week the past large slope to update investors connected its profits, which slipped 5 per cent to $2.4 cardinal successful the March 4th amid a compression connected nett margins.

Elsewhere successful fiscal services, security elephantine QBE connected Friday said premiums were expanding by 11 per cent successful its Australian business, arsenic the manufacture continues to propulsion done hefty terms rises owed to costs from labour and materials, harm from earthy disasters and reinsurance expenses.

At its yearly shareholder meeting, QBE reiterated its nett guidance and said Australian premiums were up 11 per cent successful the twelvemonth to date, down from 13.9 per cent successful 4th fourth of 2024. Across the full QBE group, overmuch of which is overseas, premiums were up 7.3 per cent successful the twelvemonth to date.

QBE president Mike Wilkins says higher frequence of catastrophes, rising outgo of materials and labour, and higher reinsurance costs are each pushing security premiums higher.

Soaring security costs person helped thrust up Australia’s ostentation rate, and president Mike Wilkins acknowledged the cost-of-living unit connected households, portion pointing to the wide menace from clime change.

“The persistency of catastrophes, the rising outgo of materials and labour and higher reinsurance costs are each contributing to the outgo of premiums,” Wilkins said.

“QBE and the security manufacture person been advocating for measures that trim earthy peril hazard and summation mitigation and assemblage resilience arsenic this is captious to code security affordability and accessibility.”

QBE and different insurers person called for greater concern infrastructure to support communities from disasters, specified arsenic flood levees and changes to land-use rules and gathering standards to marque homes much resilient.

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