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CommBank share price class action dismissed
A court has dismissed a class action that alleged Commonwealth Bank traded shares at an artificially inflated price amid its failure to comply with anti-money laundering obligations.
Naomi Neilson
The failed class action, supported by Omni Bridgeway, alleged the Commonwealth Bank of Australia (CBA) did not comply with continuous disclosure obligations and did not correct allegedly defective cleansing notices between June 2014 and August 2017.
Due to the alleged deficiencies, the applicants said CBA shares traded on the ASX “at an artificially inflated price”.
While the current matter involved separate questions of legal liability, the case related to CBA’s $700 million penalty in August 2017 for a failure to comply with its obligations under the Anti-Money Laundering and Counter Terrorism Financing Act 2006.
The present applicants, Philip Anthony Baron and Zonia Holdings, alleged the bank had information relating to these contraventions but failed to disclose them on the Australian Securities Exchange (ASX).
They alleged that had this been disclosed, “it would have had a material effect on the market price of CBA’s shares”.
The class action also alleged the bank engaged in misleading or deceptive conduct “on a continuous basis” by failing to publish, correct or modify the various representations on the ASX.
In a summary, Justice David Yates said the applicant’s matter “was such that the court was not satisfied the ASX listing rules required the bank to disclose that information to the ASX”.
Justice Yates added that even in the event the information had been disclosed by the bank, he was not satisfied it would have been likely to influence “persons who commonly invest in securities in deciding whether to acquire or dispose of CBA shares”.
“More generally, I am not satisfied that the information, in any of its pleaded forms, was information that a reasonable person would expect to have a material effect on the price or value of CBA shares if that information were to have been generally available at the relevantly pleaded times,” Justice Yates said.
The only orders made were to provide the parties with an opportunity to bring agreed orders and answers to common questions.
The reasons for the judgment were restricted until mid-May.
