Litigation Funder IMF Bentham Ltd (ASX:IMF) Launches Class Action Against Commonwealth Bank of Australia (ASX:CBA)
Sydney-based IMF Bentham Ltd (ASX:IMF), which funds lawsuits in Australia and internationally, has now made a formal announcement that it will back a class-action against Commonwealth Bank of Australia (ASX:CBA) on the behalf of company shareholders. The lawsuit is pertaining alleged violations of Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML Act). IMF has invited registrations from shareholders to participate in the class action in the Federal Court of Australia. Those who purchased CBA shares between 17 August 2015 and 3 August 2017, and held any position until 3 August 2017, can join IMF. The litigation funder is backing the allegations that CBA failed to provide mandatory “continuous disclosure” on breaches and CBA’s “misleading and deceptive public statements claiming performance by CBA of its obligations under the AML act”. Claims against CBA are based on civil penalty proceedings, another lawsuit, launched by the Australian Transaction Reports and Analysis Centre (AUSTRAC), citing “serious and systemic non-compliance” with the AML act. Other Australian regulators are also investigating CBA, based on AUSTRAC findings on shady transactions. CBA shares are down more than 10% since it released an ASX-filing on 4 August about AUSTRAC’s actions. That’s a big-down move for the largest Australian bank’s stock, shedding over $14 billion in market-capitalisation in just over a month. IMF has a reputation of funding class action lawsuits with a 91% win-rate in 162 cases it participated. But this might be the biggest in the law-firm’s history as CBA’s potential penalties are expected to cost billions of dollars. More concerning for shareholders was CBA’s stand against AUSTRAC in the court, the bank opted to assess its potential liability instead of rejecting claims, as reported by Reuters. CBA’s CEO Ian Narev is set to leave in a year, along with a major board reshuffle entailing the departure of three non-executive directors. CBA’s earnings forecasts can see a big step-down if expected liabilities from the multiple investigations into its alleged misconduct, related to money laundering, start materialising.