Law firm Slater and Gordon says it is now partnering with global litigation funder Therium to investigate a major investor class action against AMP.
It follows shocking revelations from the banking royal commission from the past fortnight, where more than a billion dollars has been wiped from AMP’s market value since it admitted to lying to the regulator last week.
Ben Hardwick, Slater and Gordon Head of Class Actions, says the claim could potentially be one of Australia’s biggest investor class actions, given the loss of value to shareholders.
“Not only did senior executives admit AMP had been charging significant fees for financial advice services it did not provide, but they also admitted the bank tried to conceal these practices by repeatedly telling Asic they were the result of an administrative error,” he said in a statement on Tuesday.
“We allege that this conduct was both unlawful and unethical and reflected serious compliance problems within AMP, and the market had a right to be informed about what they were buying into.”
Slater and Gordon’s allegations against AMP:
On 27 May 2015, AMP issued a breach report to Asic in relation to a regular practice of charging ongoing fees to customers in circumstances where they received no service.
Hardwick says the proposed claim against AMP will allege the company ought to have disclosed to the ASX from 27 May 2015, that:
(1) For many years, it had regular business practices of charging financial advice customers ongoing service fees in circumstances where it knew it was not entitled to charge those fees because it was not providing any services to those customers;
(2) It made numerous false and misleading statements to the Australian Securities and Investments Commission (Asic) designed to present the problem of charging ongoing services fees, where it was not providing any services, as being caused by administrative oversight or error rather than deliberate business practices; and
(3) The practice of deliberately charging customers in circumstances where AMP knew it was not entitled to do so, and the subsequent misleading of Asic, arose from inadequate monitoring, reporting and governance controls, and a lack of verification procedures and proper oversight of interactions with Asic.
Hardwick said: “We allege this conduct escalated and continued without being disclosed until it was ultimately revealed in the royal commission in the week commencing 16 April 2018.”