Westpac in Australia resolves $81 million auto finance class action suit

Australia’s Westpac Banking Corp has agreed to a A$130 million ($81.84 million) settlement in a class action lawsuit that accused the bank of breaching anti-money laundering laws. The lawsuit alleged that Westpac failed to adequately monitor payments that could be linked to child exploitation.

The settlement represents one of the largest in Australian corporate history and follows a scandal in 2019 that revealed a major breach in Westpac’s systems that allowed payments to be made to the Philippines, potentially linked to child exploitation.

The class action was filed on behalf of thousands of investors who saw the value of their shares drop following the scandal. The lawsuit alleged that Westpac had breached its continuous disclosure obligations by failing to adequately disclose the compliance issues that led to the breach of anti-money laundering laws.

Upon reaching the settlement agreement, Westpac stated that it was “the right thing to do” and that it was in the best interest of the bank and its shareholders to resolve the matter. The bank acknowledged the seriousness of the issues raised in the lawsuit and reiterated its commitment to implementing the necessary changes to prevent similar incidents from occurring in the future.

The settlement amount will be funded by Westpac’s existing provisions, with the bank stating that it did not expect the settlement to have a material impact on its financial results. In addition to the financial settlement, Westpac has committed to implementing a range of measures to strengthen its anti-money laundering processes and improve its compliance with regulatory requirements.

The settlement represents a significant milestone for Westpac as it seeks to move past the scandal and restore its reputation. The bank has faced intense scrutiny and criticism in the wake of the scandal, with regulators and stakeholders calling for swift action to address the compliance failures that led to the breach of anti-money laundering laws.

Westpac’s willingness to reach a settlement in the class action lawsuit is seen as a positive step towards rebuilding trust and confidence in the bank. The resolution of the lawsuit is expected to provide some closure for investors who were affected by the scandal and marks the beginning of a new chapter for Westpac as it works to rebuild its reputation and strengthen its compliance processes.