Class action against Comm Bank commences
2 July 2018, Written by David Simmons
Phi Finney McDonald has officially commenced its shareholder class action against Australia's biggest bank in relation to alleged disclosure breaches.
The claim, backed by some of the world's biggest institutional investors, is on behalf of shareholders that acquired CBA shares between 16 June 2014 to 3 August 2017, but is limited to those that executed litigation funding agreements with Therium Australia prior to commencement.
The action follows the historic $700 million settlement of the proceeding brought by the Australian Transaction Reports and Analysis Centre (AUSTRAC) against CBA, which alleged widespread breaches of anti-money laundering legislation.
Institutional investors from Australia, North America, and Europe are backing the claim, as well as US pension funds including the California State Teachers Retirement System, the Teachers Retirement System of Texas, the Massachusetts Pension Reserves Investment Management Board, and the Colorado Public Employees Retirement Association.
Phi Finney McDonald director Odette McDonald calls the class action a "turning point" for Australian shareholder class actions.
"This represents a turning point in Australian shareholder class actions," says McDonald.
"It reflects the rising levels of engagement amongst institutional investors, who are taking time to consider their options. Our clients are keen to pursue losses from alleged wrongdoers whether for themselves or as fiduciaries. However, they also want influence over who represents them, and on what terms."
The CBA class action is a coup for the young law firm, which was established in July 2017 and has quickly risen the ranks and developed a reputation as a leader in the class action scene.
The Commonwealth Bank has been under constant fire from regulators and class actions following the Royal Commission which unveiled cultural and regulatory defects in Australia's banking system.
Recently, CBA unveiled its plans to demerge key businesses and re-list them as separate entities on the ASX. CBA's wealth management and mortgage broking businesses will separate from the Bank and become separate listed entities in their own right.
The recent $700 million settlement CBA made with AUSTRAC was the largest of its kind in Australian corporate history and was worth almost double the amount that CBA initially predicted.
Shares in CBA are down 0.23 per cent to $72.70 per share at 4.10pm AEST.
Business News Australia
Author: David Simmons