Lunchtime ASX small cap wrap: who’s afraid of the financial watchdog today?
Link copied to
ASX small caps have had a rough week, but it’s been even worse at the big end of town.
This time it’s Westpac which has fallen foul of the financial regulator AUSTRAC, which alleged on Wednesday the bank had committed no less than 23 million breaches of anti-money laundering laws.
It follows similar allegations levelled against Commonwealth Bank in 2017 (which resulted in a $700m settlement), as well last year’s explosive Royal Commission which put a troubling spotlight on routine failings across the sector.
But evidently, the culture and compliance problems facing Australia’s big banks continue to linger.
Westpac’s lack of effective controls around its international payment systems included troubling links to child exploitation, with multiple transactions going back to 2013 that were linked with “suspected child exploitation facilitators” in south-east Asia, AUSTRAC said.
Federal Attorney-General Christian Porter has flagged big penalties for the bank, while Westpac CEO Brian Hartzer remains under pressure.
There was slightly less pressure on local markets today, as stocks found demand following two days of steady falls.
The ASX Small Ords rose by 8.8 points into midday trade to 2,881.20, for an intra-day gain of 0.3 per cent.
Among the leaders, medicinal kava company Fiji Kava Ltd (ASX: FIJ) found demand after announcing that its products have gone live on the US marketplace of global ecommerce giant Amazon.
And food & beverage investment company Digital Wine Ventures (ASX:DW8) rose strongly, with news that its WINEDEPOT platform will be revenue-generative this quarter, having successfully processed its first wave of orders on behalf of paying customers.
Leading the laggards was diversified mining company Cazaly Resources (ASX:CAZ), which crashed by more than 50 per cent on no news, two days after the company held its annual general meeting.