Commonwealth Bank Faces Second Probe as Scandal Fallout Widens
Commonwealth Bank Faces Second Probe as Scandal Fallout Widens
(Bloomberg) -- The fallout from the Commonwealth Bank of Australia’s money-laundering scandal widened, with the banking regulator launching an inquiry into the lender’s culture and governance.
The nation’s biggest lender is already facing a court case from the financial crime agency alleging it breached money-laundering and terrorism financing laws more than 50,000 times, an investigation into its disclosure practices by the securities regulator and a potential class-action suit.
Adding to its woes, the Australian Prudential Regulation Authority said Monday it will open an inquiry into governance, culture and accountability at the bank. Separately, Treasurer Scott Morrison said further action is “in the wind.”
The APRA inquiry, which is expected to take six months and will paid for by the bank, will focus on whether its “organizational structure, governance, financial objectives, remuneration and accountability frameworks are conflicting with sound risk management and compliance outcomes.”
The allegations of money-laundering breaches are the third major public relations scandal to hit Commonwealth Bank in the past few years, after it faced claims it gave poor financial advice to wealth management customers and accusations it failed to honor insurance claims.
Commonwealth Bank “recognizes that events over recent years have weakened the community’s trust in us,” Chairman Catherine Livingstone said in a statement. “We welcome this opportunity for independent parties to review the work we have already undertaken and advise on what more we can do.”
To contact the reporter on this story: Emily Cadman in Sydney at ecadman2@bloomberg.net.
To contact the editors responsible for this story: Marcus Wright at mwright115@bloomberg.net, Peter Vercoe, Edward Johnson