Brian Hartzer, chief executive officer (CEO) of Westpac, has announced hat he will be stepping down amidst the money laundering scandal faced by the bank.
The resignation of Westpac CEO Brian Hartzer comes amidst allegations faced by Australia's second-largest bank regarding breaches of counter-terrorism financing and money laundering laws.
According to the Australian Transaction Reports and Analysis Centre (AUSTRAC), Westpac bank committed 23 million breaches of anti-money laundering and counter-terrorism financing laws that each breach carries a maximum a penalty of A$21 million. Most of the breaches were from the bank’s failure to make timely reports on international transfers to Austrac.
According to AUSTRAC, Westpac allegedly failed to properly report over 19.5 million international funds transfers between 2013 and 2018. AUSTRAC chief executive Nicole Rose said Westpac’s failure to report the transfers properly compromised “the integrity of Australia’s financial system” and “hindered its ability to track down the origins of financial transactions, when required to support police investigations”.
The watchdog also pointed out that there were a small number of transactions on accounts that were potentially linked to “child exploitation risks” and that the bank failed to conduct the necessary automated detection procedures on these transactions.
The bank also announced on Tuesday that Chairman Lindsay Maxsted would also step down in 2020. The bank's board has faced immense pressure from the allegations including a warning by Australian Treasurer Josh Frydenberg that AUSTRAC had the option to disqualify executives.
Hartzer issued a statement to the Australian Securities Exchange saying: "As CEO, I accept that I am ultimately accountable for everything that happens at the bank." Hartzer, who has been CEO of Westpac since 2015, was given a 12-month notice period and will be paid A$2.68 million salary during that time.
Westpac chief financial officer (CFO) Peter King will replace Hartzer temporarily while a successor was being selected by the bank.
