Non-major lodges defence in court

by Rebecca Pike24 Jul 2018

AMP has lodged its defence against shareholders in proceedings led by Quinn Emanuel in the Supreme Court of New South Wales.

The non-major is facing action after shareholders accused it of withholding information relating to its fees for no services and its interactions with the Australian Securities and Investments Commission (ASIC). It is also defending its report to ASIC by Clayton Utz.

AMP has confirmed it will be vigorously defending these and similar proceedings. It is facing four other class actions over the issue.

Over the last few months AMP has been accused of charging advice fees to clients where no service was provided.

It was also accused of misleading ASIC by changing reports from law firm Clayton Utz as part of the regulator’s investigation into the fees for no service matter.

While the group has admitted to charging these fees and has refunded customers, it is continuing to deny misleading ASIC. 

Shareholders have now taken action against AMP, claiming it should have disclosed the information.

However, AMP has said any information it did have in respect of these matters was not material to AMP’s share price.

AMP said the fees for no service was not material with regards to the number of affected customers and the amount of fees paid.

It also said it was canvassed extensively during a Royal Commission testimony on 16 April 2018 without causing any material movement in AMP’s share price on that day.

While the group has admitted to certain representations it made to ASIC, it said it did not have the effect of misleading ASIC in any material way.

AMP notified ASIC in October 2017 when it handed over the Clayton Utz report, resulting in an investigation from ASIC.

AMP said the regulatory dealings were confidential and not of a kind expected to be disclosed to the market.

Shareholders have also said information surrounding Clayton Utz’s independence should have been disclosed.

AMP said the report makes note of the fact the Board of AMP appointed the firm to conduct an investigation independent of AMP’s advice business.

It also said that ASIC knew that Clayton Utz was a member of AMP’s external legal panel and was acting for AMP in relation to ASIC’s investigation of the fees for no service issues. 

It added, “There is nothing about the independence of the Clayton Utz Report that required disclosure.  Further, Clayton Utz did not make any changes to the report as a result of communications with AMP which Clayton Utz did not agree with, and Clayton Utz carefully verified the accuracy of the statements in the report.”

AMP will return to the Federal Court in Melbourne on 14 August 2018 for the hearing of its application to have the four other class actions transferred to the NSW Supreme Court.

 

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