Money Laundering Scandal in Commonwealth Bank of Australia

Organizational Behavior
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Table of Contents
1. Introduction..............................................................................................................................3
1.1 Background of the Study........................................................................................................3
1.2 Rationale of the Study............................................................................................................3
2. Annotated Bibliography...............................................................................................................4
2.1 Introduction............................................................................................................................4
2.2 Behavioral Factors.................................................................................................................4
2.3 Scandal-hit sectors.................................................................................................................5
2.4 Transaction Monitoring Problems.........................................................................................5
2.5 Unethical or grossly incompetent conduct.............................................................................6
3. Conclusion...................................................................................................................................7
Reference List..................................................................................................................................8
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1. Introduction
1.1 Background of the Study
This study describes Commonwealth Bank of Australia (CBA), its money laundering and
fraudulence. It is an integrated financial service provider operating in Australia, New
Zealand, Europe, and the Asia-Pacific region that has been accused of rupturing the Anti-
Money Laundering and Counter-Terrorism Financing. Being Australia’s biggest bank by
assets, Commonwealth Bank encountered money laundering scandal due to its inadequate
monitoring of transactions. According to (Hannah.T, 2013), this eventually led to the flow of
the millions of dollars to the drug importers for which the bank had to pay the largest fine in
the corporate history of Australia. For its systemic failures, AUSTRAC has accused the bank
to pay $ 700 million excluding the legal costs on the account of suspicious deposits, transfers
and accounts which has affected all its stakeholders. CBA has been fined several times the
market value of the bank. It is also dedicated to meet its global regulatory responsibilities for
identifying, treating and managing of Money Laundering or the Terror Funding risk.
1.2 Rationale of the Study
(Ahmed, 2012), claimed that the scope of money laundering activities has increased
contributions to the disruptions of the financial system. The study analyzes the unethical or
grossly incompetent conduct from the organizational failures. This topic is very important to
understand the behavioral issues prevailing in the Commonwealth Bank of Australia and
hence chosen because this is time relevant one. For a period of three years, the bank failed to
properly monitor the transactions as intended for which it is held accountable as there is an
uphold in the drug deals.This study also highlighted about the official investigation
conducted by Australia's financial intelligence and regulatory agency, Corporate regulator
ASIC (Australian Securities and Investments Commission), and the banking regulator,
APRA (Australian Prudential Regulation Authority) for its accountability.Finally,the market
approval was given to the deal and the regulators were allowed to professed their victory as
accused of its unethical activity.
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