ASIC to fast-track Westpac probe, prepares for wave of wind-ups

The corporate watchdog's chief enforcer has promised to expedite its investigation into Westpac's handling of money laundering breaches as a similar investigation into Commonwealth Bank drags on three years after the scandal was first made public.

The Australian Securities and Investments Commission also revealed it was preparing for a wave of business collapses in the last few months of the year, during an appearance at a Parliamentary Joint Committee hearing on Wednesday.

Senator Deborah O' Neill questioned ASIC's deputy chairman, Daniel Crennan, QC, about the status of the two investigations into Australia's two biggest banks flowing from the bombshell court actions from the financial intelligence regulator AUSTRAC.

Mr Crennan was tight-lipped about the twin investigations, confirming only that they were afoot and that the judge hearing the Westpac matter expected to be informed when multiple regulators were involved.

"Will the Westpac investigation take as long as the CBA investigation? That's three years old now," Senator O'Neill asked.

The investigations are understood to be focused on potential breaches of continuous disclosure obligations in relation to the money laundering breaches admitted by Commonwealth Bank in 2018 and Westpac in 2020.

The Australian Financial Review understands Commonwealth Bank directors and executives were interviewed by the regulator early in 2019 in compulsory interviews conducted under Section 19 of the ASIC Act.

Commonwealth Bank would agree to pay a $700 million penalty – the biggest in Australian corporate history – to settle the allegations, which included the failure to deliver 55,000 transaction threshold reports and its failure to monitor 778,000 accounts.

Westpac was rocked by allegations from AUSTRAC in late 2019 that it had committed more than 23 million breaches of the AML-CTF Act and had turned a blind eye to customers it should have suspected were paedophiles.

Earlier in the hearings on Wednesday, ASIC executive director and Victorian regional commissioner Warren Day said the regulator was gearing up for a wave of business collapses later in the year as bank repayment holidays rolled off and federal government wage subsidies expired.

Mr Day said the regulator was clarifying its expectations about what needed to occur for businesses to close down in an orderly fashion without the need to appoint administrators and needlessly incur additional costs.

"So we would expect, and there has been some media commentary about this, to see ... more business closures through that last quarter of this calendar year," Mr Day said.

Accordingly, there would be more focus on areas such as insolvencies and insolvent trading "for those months on the expectation there might be some issues".