Westpac Banking Corp (ASX: WBC) shares are on watch this morning after the latest development in its AUSTRAC scandal.
What’s the latest on Westpac’s AUSTRAC scandal?
According to an article in the Australian Financial Review (AFR), APRA is now looking into Westpac’s AUSTRAC scandal.
Treasurer Josh Frydenberg has said senior management should be under scrutiny following last week’s revelations.
Westpac is the latest bank to be caught up in an AUSTRAC money laundering scandal after Commonwealth Bank of Australia Ltd (ASX: CBA) in 2018. In that instance, the bank and the financial agency reached a $700 million penalty settlement in June.
Westpac shares plummeted 6.56% to $24.77 per share following the breaking of the AUSTRAC scandal last week. The Aussie bank “unreservedly” apologised following the news, as it looks to urgently improve its anti-money laundering and counter-terrorism funding systems.
CEO Brian Hartzer is facing pressure to step down as Westpac scrambles to contain the fallout from the AUSTRAC scandal.
What’s APRA got to do with it?
AUSTRAC’s legal action against Westpac last week kicked things off and it looks like APRA could wade in this week.
Mr Frydenberg said APRA may look at disqualifying the Westpac board in the wake of the money laundering scandal, which has been linked to offshore child exploitation.
APRA has the powers to disqualify boards and executives under legislation that “came into force in 2018,” said Mr Frydenberg.
APRA has the power to fine banks and can apply to the court for fines of up to $500 million. The Westpac share price could be under pressure this morning, as investors work to re-value the company’s shares ahead of potential financial damages.
Any leadership changes stemming from the AUSTRAC scandal could also put Westpac shares under pressure throughout the week.
It’s the latest turn in an up and down year for the Aussie banking sector, which has shareholders asking questions.
The post Westpac shares on watch as AUSTRAC scandal builds appeared first on Motley Fool Australia.
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