Pressure is continuing to mount at the largest lender Down Under.

Commonwealth Bank of Australia (CBA) was hit yesterday with a class-action lawsuit over a money laundering scandal that has already shaved billions off its market value and rattled Australia’s financial sector. Meanwhile, the bank has said it will not file its defence against separate allegations from a financial intelligence agency accusing it of failing to report hundreds of suspicious transactions until mid December.  

Litigation financier IMF Bentham said it would fund the class-action case against Australia’s largest lender. The firm accuses CBA of making false and misleading statements and failing to disclose breaches of anti-money laundering rules for years. Its lawsuit is separate to one filed by AUSTRAC on 3 August, which triggered a vicious slide in CBA’s share price and left it exposed to potentially billions of dollars in fines. 

IMF Bentham would bankroll the class-action suit on behalf of all CBA shareholders who bought stock between 17 August 2015 and 3 August 2017, seeking damages for the premium paid for the stock as material information remained hidden. 

The case was filed just one day after CBA said it would not file its defence against AUSTRAC’s allegations until 10 days before Christmas.  

The transactions regulator will take another three months to respond in a case barristers told Australia’s Federal Court would be highly complex and drawn out. 

Each of AUSTRAC’s 174 allegations that CBA failed to file suspicious transaction reports will involve a “mini trial” of its own, John Sheahan QC, representing CBA, reportedly told the court Monday. He reportedly added that the defence would take “an enormous amount of work”, and “it is not going to be a vacation camp of any description”. 

CBA’s share price was up 0.24 per cent, trading at A$74.59 ($59.51) at the time of writing (1:12pm, 5/9/2017). On 4 August - the day after AUSTRAC began its proceedings against CBA - the bank’s share price slid 3.9 per cent, or A$3.25 per share, wiping around A$5.6 billion off its market value. 

CBA is also under investigation by Australia’s banking and corporate watchdogs over the suspicious transactions cited in AUSTRAC’s claim. 

Investors are concerned that the probes and lawsuits Down Under could spur enquiries from foreign regulators, as some of the money was sent offshore. CBA has around 800,000 retail and 4 million indirect Australian shareholders, according to its 2017 annual report. 

Amid the bank’s most tumultuous period in its 106-year history, CBA is now on the hunt for a new chief executive, after it announced current head Ian Narev will retire by the end of the 2018 financial year.