AMP served with two class actions
Written on the 10 May 2018 by David Simmons
In the fallout of the Royal Commission, AMP (ASX: AMP) has been hit with two separate class action proceedings brought on behalf of aggrieved shareholders.
One claim has been filed in the Supreme Court of New South Wales by Quinn Emanuel Urquhart & Sullivan (QE) and the other in the Federal Court of Australia by Phi Finney McDonald.
Both proceedings relate to matters heard during the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
AMP says it "intends to vigorously defend the proceedings".
The class actions relate to revelations that AMP was charging customers fees for services that were not provided.
Phi Finney McDonald Director Tim Finney (pictured) says the class action being brought by his firm will seek compensation for investors who acquired AMP shares between 6 May 2013 and 13 April 2018.
"AMP has admitted that it deliberately and systematically charged consumers fees for services that were not provided," says Finney.
"AMP has failed its clients. It has badly let down its many loyal shareholders, who had the right to expect more from one of Australia's largest and most reputable financial services companies."
QE's class action proceeding against AMP comes after the bank's market capitalisation plummeted by approximately $2 billion.
QE will allege that AMP breached its continuous disclosure obligations and made misleading statements, causing shareholders significant loss.
The fallout from the Royal Commission has seen AMP's share price fall by 14 per cent since 16 April 2018 to a six-year low.
QE Partner Damian Scattini says shareholders have plenty of reasons to be outraged.
"I don't think there's anyone in Australia who hasn't been shocked and appalled by the behaviour exposed by the Royal Commission," says Scattini.
"AMP admitted it has been misleading its customers and the market for years it knowingly charged its loyal customers fees for advisory services it never provided, and then repeatedly lied about it to the corporate regulator."
"The deceit of AMP and its Board is reprehensible and they must be held financially accountable."
Last week, AMP denied allegations that it acted criminally, two weeks after it admitted it was charging customers for advice they never received.
The institution says it takes full responsibility but does not accept submissions made to the Banking Royal Commission that it's actions amount to a criminal office.
It also denied allegations that it overstepped bounds when it provided ASIC with a report from an "independent" investigation into its business compiled by Clayton Utz.
In the wake of the "fee for no service" drama two of AMP's directors, CEO Craig Meller and Chairman Catherine Brenner, have departed the company.
AMP's Group General Counsel and three non-executive directors have also left the company.
AMP together with the nation's big four banks have collectively paid nearly $219 million in compensation to more than 310,000 financial advice customers charged fees for no service in return.
AMP has personally refunded $4.7 million across more than 15,700 customers since it began cooperating with ASIC in May last year.
Business News Australia
Author: David Simmons