Money laundering scandal has cost this bank CEO his job

Brian Hartzer, CEO of an Australian Bank, Westpac, has been asked to step down on December 2nd, 2019, over issues regarding a money-laundering scandal, according to the Punch.

Australia’s Federal Court, along with the country’s financial intelligence agency, AUSTRAC alleged that Westpac breached anti-money laundering and terrorist financing obligations.

The Crime: Westpac was accused of breaching the law 23 times, as well as failure on their part to scrutinize international transactions that allegedly involved sending money to child pornography operations overseas.

As a result, Hartzer was identified as the first executive to take the fall. He would be resigning next month with a full salary of 2.7 million dollars (1.8 million U.S. dollars) for 2020 but would be denied his 2019 bonuses.

Ripple effect: Two top bank officials would be sanctioned as well. Chairman of Westpac, Lindsay Maxsted was advised to extend his retirement to early 2020 and Ewen Crouch, re-election bid withdrawn.

As was appropriate, we sought feedback from our stakeholders, including shareholders, and having done so it became clear that the board and management changes were in the best interest of the bank,” Maxsted said.

The Bank’s fate is still left for the courts to decide. The penalty for failing to monitor the transaction could range between $17 million and $21 million per breach.

About Westpac: Westpac Banking Corporation, commonly known as Westpac, is an Australian bank and financial services provider headquartered at Westpac Place in Sydney. It was established in 1817 as the Bank of New South Wales and on May 4, 1982 merged with the Commercial Bank of Australia (founded in 1866), becoming the Westpac Banking Corporation in October the same year. It is one of Australia’s “big four” banks and is Australia’s first and oldest banking institution. Its name is a portmanteau of “Western” and “Pacific”.

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