Australian banking giant Westpac said Tuesday its beleaguered CEO Brian Hartzer was stepping down after regulators accused the bank of wholesale breaches of money laundering rules involving more than US$7 billion.
Chief Financial Officer Peter King, who announced his retirement in September, will now take over as acting CEO of Australia's oldest bank, effective December 2.
Amid the bloodletting, chairman Lindsay Maxsted announced he will bring forward his retirement to "the first half of 2020", while long-standing director Ewen Crouch will not seek re-election. "He should have fallen on his sword straight away".
"It follows the strongest, clearest comments from the prime minister and the treasure about community expectations, and government expectations, in the face of what is a serious and profound breach", Mr Hunt said.
Mr Hartzer will forfeit 636,540 unvested share rights worth $15.56 million before Tuesday's open and - with his FY19 short-term bonus already scrapped - will also go without short-term bonuses for FY20 and FY21.
Around 19.5 million global fund transfers amounting to $11 billion were not reported to the regulator.
The Australian Transaction Reports and Analysis Centre says Westpac didn't keep proper records or have sufficient knowledge of where the money was flowing.
"The Board accepts the gravity of the issues raised by Austrac", Maxsted said in the statement.
The most serious allegations relate to a separate consumer product known as LitePay.
AUSTRAC said Westpac knew since at least 2013 the heightened child exploitation risks associated with frequent low value payments to the regions, and that the bank's senior management was briefed on these risks in June 2016.
The bank's systems were allegedly used to transfer hundreds of thousands of dollars to child exploitation rings in south-east Asia, including to pay for live child sex shows.
Prime Minister Scott Morrison was among those calling for the bank's board to consider the future of its executives, but chairman Lindsay Maxsted had said over the weekend that a change at the top would be destabilizing for the bank.
It's the lack of oversight of customer payments linked to child trafficking and child pornography that's triggered the outcry.
Hartzer is the latest CEO of an Australian bank to step down as the industry reels from one scandal to another.
"People need to be accountable for the behaviour of companies under their leadership".
In August 2017, Ian Narev resigned as Commonwealth Bank of Australia CEO less than two weeks after the lender was sued for more than 53,000 breaches of money-laundering rules. It negotiated a 700 million Australian greenback settlement.
Mr Hartzer, who succeeded Gail Kelly as CEO in February 2015, had looked set to fight on as recently as Monday, when he reportedly held a meeting with bank executives. Only ANZ Bank's Shayne Elliott is still in his job.
Westpac said Mr Maxsted's departure would allow a new chairman to oversee the appointment of Mr Hartzer's permanent successor.
The swift turnaround by U.S. born Brian Hartzer underscored how politically and publicly sensitive missteps by Australia's big banks have become in the wake of a bruising public inquiry that found rampant profiteering in the industry.