Financial services giant AMP could be facing a series of class actions after its head of financial advice acknowledged during the Royal Commission that the company had repeatedly misled the Australian Securities and Investments Commission (ASIC) about charging customers for advice they never received.
AMP’s first casualty was its CEO, Craig Meller, who stepped down on Friday. His fall from grace has been unusually rapid, given that AMP only started giving evidence last Monday.
Eyebrows were raised when AMP’s head of financial advice, Anthony Ragan, admitted that his company had lost count of the number of times it had lied to ASIC, adding that it had been charging customers for nearly a decade for advice that was never delivered.
The company has lost $1bn in shareholder value since early March.
Meller’s resignation was accompanied by an apology. “I am personally devastated by the issues which have been raised publicly this week, particularly by the impact they have had on our customers, employees, planners and shareholders,” he said. “This is not the AMP I know and these are not the actions our customers should expect from the company.
“I do not condone them or the misleading statements made to ASIC. However, as they occurred during my tenure as CEO, I believe that stepping down as CEO is an appropriate measure to begin the work that needs to be done to restore public and regulatory trust in AMP.”
AMP could face several shareholder class actions, after law firms Slater and Gordon, Shine Lawyers, and Quinn Emanuel Urquhart & Sullivan (QE) all announced investigations on behalf of shareholders.
QE intends to pursue the class action with backing from Burford Capital, a global finance firm focused on law.
“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” said Damian Scattini, partner at QE.
“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.”
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