Westpac is facing a fresh class action following the AUSTRAC investigation

Embattled bank Westpac, which is currently fighting accusations of anti-money laundering breaches, has been hit with fresh legal woes.

Westpac is facing a new legal headache after claims the bank deceived its investors by failing to disclose the extent of their issues relating to an alleged money laundering scandal.

Westpac is facing penalties for allegedly breaching money laundering and counter-terrorism laws following an investigation by Australia’s financial intelligence agency Australian Transaction Reports and Analysis Centre (AUSTRAC).

AUSTRAC alleges that Westpac broke the law 23 million times by failing to report more than 19.5 million international funds transfers over five years.

It is alleged that Westpac failed to have appropriate detection scenarios to detect known child exploitation typologies, consistent with their own guidelines.

Due to this inaction, the bank has been hit with its first class action seeking damages on behalf of institutional and retail investors.

The class action, lodged by Phi Finney McDonald, is on behalf of investors who purchased shares in the bank between December 16, 2013 and November 19, 2019.

“The governance issues raised in this case are extremely serious, and the losses caused to our clients are substantial,” said Tim Finney, director at Phi Finney McDonald.

The case alleges that Westpac failed to assess the risks associated with the international transfer systems and did not undertake appropriate due diligence on customers making financial transactions.

The case also alleges that Westpac did not report the instances to AUSTRAC and failed to pass on information to the relevant agencies.

Phi Finney McDonald has not identified the amount of damages that will be sought and is still looking for investors who wish to be involved.

Westpac acknowledged that it had been served with the legal action and said it would be defending the claims.

At last weeks AGM, Westpac’s chairman Lindsay Maxsted maintained the bank had told agencies and investors all relevant information.

“We can only put out into the marketplace the information that we know,” he said.

Originally published as Westpac is facing a fresh class action following the AUSTRAC investigation