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AMP could face three class action lawsuits

AMP could face three class action lawsuits

Three separate law firms are seeking to bring class action suits against AMP on behalf of its shareholders following revelations from the royal commission.

Over the past few weeks, senior AMP executives have appeared before the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry to give testimony regarding misconduct relating to financial advice, with them admitting to a number of potential crimes. 

These included providing false and misleading statements to the regulator and charging customers for services that were not provided.

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The ASX-listed lender, which recently announced the immediate resignation of its CEO, has lost more than $1 billion in shareholder value since March, with the losses escalating following the royal commission hearings.

As such, three separate law firms have announced that they are investigating the prospect of a class action lawsuit against the financial giant on behalf of its shareholders.

Shareholders that acquired shares from 30 May 2017 to 13 April 2018

Most recently, Sydney-based law firm Shine Lawyers revealed that it was investigating a class action on behalf of shareholders against AMP Limited.

Shine’s investigation is focused on claims that AMP engaged in “misleading and deceptive conduct and false representations by lying to ASIC on multiple occasions about the manner in which its clients were charged for services that were not provided”.

The firm’s class actions team is also examining allegations that AMP failed to disclose to the market material information in relation to its dealings with the regulator, ASIC, and failed to disclose material information about its risk management processes.

When that information was made public during the royal commission hearings, AMP’s share price dropped by 10.2 per cent, Shine Lawyers argued.

“We encourage all shareholders who purchased shares in AMP from 30 May 2017 to 13 April 2018 to register their interest in a claim on Shine’s website,” said class actions expert Jan Saddler. 

“Shine Lawyers are of the view that AMP has breached a number of provisions of the Corporations Act and ASX Listing Rules. AMP executives gave evidence at the royal commission that their conduct fell far short of the standards expected by shareholders, investors, policy holders and community expectations generally.

“The integrity of the Australian financial markets depends upon all stakeholders engaging in conduct that is consistent with the law.”

Ms Saddler continued: “What we are seeing coming out of the royal commission is that certain stakeholders, namely the financial institutions, seem to think that they are the exception to the rule. The matters we are investigating in relation to AMP would certainly suggest that that is the position AMP took when they became aware of these issues.”

Shareholders that acquired shares between 24 May 2013 and 16 April 2018

Los Angeles-based litigation firm Quinn Emanuel Urquhart & Sullivan (QE) is also investigating the prospect of a class action lawsuit against AMP on behalf of aggrieved shareholders.

The class action is being backed by Burford Capital, a global finance firm focused on law and one of the largest providers of litigation finance. It is calling on shareholders that acquired shares between 24 May 2013 and 16 April 2018 to register their interest in the case.

Speaking of the action, QE partner Damian Scattini said: “The revelations of AMP’s misconduct are especially upsetting given the people who were hurt — the ordinary Mums and Dads who as shareholders gave AMP one of Australia’s largest shareholder registers, who have now lost their savings due to its dishonesty, and who as customers were charged for services AMP has admitted they never received, all so executives could make hefty bonuses.

“QE has been investigating AMP’s precipitous share price fall even before the most recent revelations of misconduct, and having Burford, the world’s top litigation finance company, in place as our partner means we’re ready to move quickly on behalf of shareholders.”

Burford Capital’s managing director, Craig Arnott, added: “The conduct admitted at the royal commission is starkly at odds with AMP’s responsibilities and shareholders’ legitimate expectations, requiring redress so that AMP’s shareholders can recover the value that has been lost.

“Burford is glad to join forces with Quinn’s first-rate team so we can help deliver that result for shareholders, which we hope will be as swift as possible.”

Shareholders that acquired shares between 28 May 2015 and 13 April 2018

Finally, Slater and Gordon has confirmed that it, too, will be investigating the “potential liability” of AMP to its investors.

It has partnered with litigation funder Therium to investigate the major investor class action.

Slater and Gordon head of class actions Ben Hardwick said that the AMP claim had the potential to be one of Australia’s biggest investor class actions.

“More than a billion dollars has been wiped from AMP’s market cap since these revelations were made public during the royal commission hearings and it has left thousands of investors reeling,” Mr Hardwick said.

“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.

“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.” 

It will be representing shareholders who acquired shares in AMP Limited at any time between 28 May 2015 and 13 April 2018.

[Related: Government announces ‘significant’ corporate crackdown]

AMP could face three class action lawsuits
mortgagebusiness

Annie Kane

Annie Kane is the editor of Mortgage Business.

As well as writing news and features on the Australian mortgage market, financial regulation, fintechs and the wider lending market – Annie is also a regular contributor to the Mortgage Business Uncut podcast.

Before joining Momentum Media in 2016, Annie wrote for a range of business and consumer titles, including The Guardian (Australia), BBC Music Magazine, Elle (Australia), BBC Countryfile, BBC Homes & Antiques, and Resource magazine.

Contact Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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