Insights

Commonwealth Bank (ASX:CBA) share price hits new record despite money laundering scandal

The Commonwealth Bank and National Australia Bank are embroiled in yet another scandal, although this hasn’t impacted on their share prices today.
The post Commonwealth Bank (ASX:CBA) share price hits new record despite money laundering scandal appeared first on The Motley Fool Australia. –

The Commonwealth Bank of Australia (ASX: CBA) share price broke a new record high on Wednesday despite being tainted by a money laundering scandal.

The CBA share price jumped over 1.4% to $104.82 even as the S&P/ASX 200 Index (Index:^AXJO) struggled to hold its head above water.

Investors aren’t perturbed by news that the bank may be in breach of anti-money laundering laws, reported the Australian Financial Review.

Money laundering scandal fails to dampen CBA share price

The potential legal headache is linked to an investigation into BSP Financial Group Ord Shs (ASX: BFL) by Papua New Guinea authorities.

BSP is a partner of CBA and to National Australian Bank (ASX: NAB). The report hasn’t impacted on the NAB share price either as it jumped 0.7% to $26.86.

The two ASX big banks are correspondent banks to BSP. This means CBA and NAB provide a channel for BSP’s customers to transfer money in and out of Australia.

How BSP’s legal problem can impact on CBA and NAB

If BSP is found guilty and is punished with sanctions, CBA and NAB will be liable under Australian law as Australian banks are required to undertake regular due diligence of their partners.

Investors will be getting another serious case of déjà vu. Australia’s largest financial institutions have a long and sorry track record of breaching regulations and behaving badly.

They have since made strides in cleaning up their act following the Haynes Royal Commission, although this latest development is a setback.

BSP under investigation

The PNG money laundering probe into BSP started in late 2019 by Financial Analysis and Supervision Unit (FASU), according to the AFR.

BSP was issued with a “show cause notice” as to why it shouldn’t be sanctioned by FASU in late 2020.

The sanctions could involve a fine, enforceable undertaking, formal public warning and/or having an enhanced audit process imposed upon the newly listed bank.

Non-disclosure issues

BSP floated on the ASX on 25 May but it didn’t disclose the money laundering probe. However, it did highlight “elevated corruption risk” in documents lodged on the ASX.

This probably won’t cut it with the ASX or shareholders if it is proven that BSP had known about the probe by FASU.

Both CBA and NAB declined to comment on BSP, according to the AFR. The big banks would only say they comply with Australian regulations.

Shareholders will be hoping this is true.

The post Commonwealth Bank (ASX:CBA) share price hits new record despite money laundering scandal appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

The Vulcan Energy (ASX:VUL) share price is rising today
ASX 200 up 0.35%: SEEK upgraded, Afterpay lower

2 quality ASX 200 tech shares that might be buys

5 things to watch on the ASX 200 on Wednesday

ASX 200 rises, Nuix jumps, REA buys stake of Simpology

Brendon Lau owns shares of Commonwealth Bank of Australia and National Australia Bank Ltd. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!