Westpac hit with US class action lawsuit

3 February 2020, Written by Business News Australia

Westpac hit with US class action lawsuit

New York-based law firm Rosen Law Firm has filed a class action lawsuit against big four bank Westpac (ASX: WBC; NYSE: WBK) over the AUSTRAC scandal.

The lawsuit seeks to recover damages for investors in the US on behalf of purchasers of Westpac securities on the New York Stock Exchange between November 11, 2015, and November 19, 2019 inclusive.

The class action refers to the bank's monitoring of financial crimes which are currently the subject of an AUSTRAC proceeding in the Federal Court of Australia.

Rosen Law Firm have named Westpac, former CEO Brian Hartzer (pictured) and current CEO Peter King as defendants in the class action.

"Westpac will be defending the claim and notes other similar lawsuits may be filed," says Westpac.

Hartzer and chairman Lindsay Maxstead resigned in the wake of the allegations from AUSTRAC that the banking group contravened the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) on more than 23 million occasions.

The corporate regulator claimed Westpac failed to report over 19.5 million international funds transfer instructions to AUSTRAC over a period of nearly five years and failed to carry out proper due diligence on transactions in South East Asia that have known financial hallmarks relating to potential child exploitation risks.

Rosen Law Firm's class action follows a similar lawsuit in Australia led by Phi Finney McDonald.

Phi Finney McDonald on behalf of shareholders alleges that Westpac's share price was artificially inflated because of the bank's alleged failures and misleading representations.

Shares in Westpac are down 1.95 per cent to $24.63 per share at 10.26am AEDT.

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