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Software glitch sees CBA face class action

Software glitch sees CBA face class action

CBA argues its alleged anti-money laundering rule breaches were largely caused by a software glitch

A purported software glitch has seen one of Australia’s biggest banks, the Commonwealth Bank of Australia (CBA) face down a class action.

An Australian lawfirm formally filed a class action suit against the bank on behalf of shareholders on Monday, 9 October, accusing it of failing to disclose widespread breaches of anti-money-laundering rules.

The lawsuit by law firm Maurice Blackburn against the nation's biggest lender follows one by the federal agency AUSTRAC, which has accused it of more than 53,000 breaches of anti-money laundering rules - breaches which have exposed it to billions in dollars of fines.

The suit, which had been previously flagged by Maurice Blackburn and litigation financier IMF Bentham Ltd, said shareholders had suffered a significant share drop in the wake of AUSTRAC's accusations.

The law firm's statement on Monday did not specify the level of damages sought. The action invites holders of CBA shares between 2015 and 2017 to join.

CBA has not disputed that it processed tens of thousands of illicit transfers but argues the breaches were largely caused by a software glitch and contests its level of responsibility.

The bank said in a statement that it planned to vigorously defend itself against the class action suit.

The bank's stock has lost roughly 8.5 per cent since AUSTRAC announced its civil lawsuit against CBA in August. CBA shares were up 0.5 per cent in Monday afternoon trade, in line with the broader market.

(Reporting by Byron Kaye; Editing by Edwina Gibbs)

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Tags legalsoftwarebugCBACommonwealth Bank of Australialaw

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