Westpac’s troubles relating to a money laundering and child exploitation scandal are set to widen with the financial crime watchdog likely to include additional allegations of wrongdoing in its case against the lender.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) last year accused the bank of failing anti-money laundering and counterterrorism laws on reporting transactions on 23 million occasions and in November filed civil proceedings in the Federal Court.
Australia’s second-largest bank says it disclosed to AUSTRAC additional suspicious matter reports in relation to potential child exploitation as well as issues regarding its obligation to file threshold transaction reports.
The bank said it has been notified by the watchdog that these matters are being investigated and it has sought further information from Westpac.
AUSTRAC has also said it may amend its statement of claim to include allegations arising from these investigations.
Shares in the banks were trading 4 per cent lower at $17.77 by 1245 AEST, and have lost nearly a third of their value since the scandal surfaced last November.
Westpac, which has already set aside $900 million for a potential legal penalty arising from the case, in May admitted to a substantial majority of the allegations.
Earlier this month, the bank released the findings of an investigation into its breaches of money laundering and child exploitation laws and blamed the failures on a mix of technology and human error, claiming there was no “intentional wrongdoing”.
The scandal led to then Westpac CEO Brian Hartzer and chairman Lindsay Maxsted stepping down, followed by a string of senior management changes.
Westpac has since set up a new legal, regulatory and compliance board subcommittee and created a new executive position directly responsible for financial crime compliance.