Press Releases issued by the Academy, by members and partners in 2008-2009 appear below.
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June 21, 2018
This is a question that took on greater meaning in the past week. Most of the banking fraternity is aware the Australian Transaction Reports and Analysis Centre (AUSTRAC) had charged that Australia’s largest company, the Commonwealth Bank of Australia (CBA), with breaching the Transaction guidelines. Typically one or two breaches could be overlooked but in this case it was more than one or two. In fact it was more than 53,000 individual events where amounts of between $5000 and $9000 were able to slip through the CBA system. Blame was placed on a new deposit ATM that failed to properly record transactions and, as a consequence, money launderers were able to launder and transfer huge amounts overseas. Even using a conservative estimate of $5000 per transaction the amount that could have been involved would be in the vicinity of A$300,000,000 (US$230,000,000).
With the staggering illustration of incompetence by CBA senior management including directors, risk management, internal audit and a host of others one would have expected AUSTRAC to throw the book at CBA. In fact they came out swinging and seemingly were going to take CBA to task. The maximum fine that could be levied could have been over $1 trillion and would have destroyed the bank. However, on June 3rd CBA agreed to accept a fine of $700 million to make the issue go away. Although this is the largest fine ever levied against an Australian bank many would argue that the fine is totally inadequate. It is the equivalent to only7% of CBA’s operating profit for the current year. Some critics of AUSTRAC’S fine believe that an amount equivalent to 50% of the current year’s profit would be a better figure if they want to get serious about money laundering. Meanwhile most of the miscreants from the CBA are still there and prospering while the shareholders have a diminution in the value of shareholder’s funds of $700 million.
At the same time one must have sympathy for the shareholders of companies that accept fines rather than go to court and risk executives going to jail, which is an option in the US. A few years ago HSBC directors agreed to accept a US$1.9 billion fine from the US for breaching anti-money laundering regulations. The decision was not hard. Pay a fine with someone else’s money, namely HSBC shareholder’s, or risk going to jail. So the shareholder doesn’t only have to foot the bill for the incompetence of their executives it is highly likely that they will remain at the bank and continue to be rewarded.
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