What was the background to the class action?
AMP Limited (ASX:AMP) is a publicly listed Australian company offering wealth management products and services. These services include financial advice which can include superannuation, retirement income and managed investment advice, strategies for personal risk protection and self-managed superannuation. The firm also has its own proprietary product offering which includes investments and risk (insurance) products. The firm has been in operation in Australia since 1849 and has a market capitalization of approximately AUD13billion.
On Monday 16 April 2018, AMP’s shares opened at AUD4.79, and by market close Friday 20 April 2018, the price of the shares had dropped by 10.2% to AUD4.30. This was following admissions made by executives of AMP at the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry that the company had misled the corporate regulator ASIC up to 20 times and made the deliberate decision to charge clients for services that it in fact did not provide. The 10.2% price drop is equivalent to an approximate drop in value of the company of AUD1.25 billion.
What claims were being investigated in the AMP Limited class action?
Shine Lawyers were of the view that AMP had breached a number of provisions of the Corporations Act and ASX Listing Rules.
Shine Lawyers alleged that AMP Ltd failed to disclose to the market, pursuant to s 674 of the Corporations Act and ASX Listing Rule 3.1, that it made a deliberate decision in 2013 and 2015 to charge clients for services never received; its advice division made 20 separate misleading statements to ASIC about those charges and failed to disclose the receipt and effect of a PWC report on its overall operations, which was information that would have had a material effect on the price or value of its shares. AMP Ltd may have also engaged in making false or misleading statements, dishonest conduct and misleading or deceptive conduct pursuant to ss1041E, 1041G and 1041H of the Corporations Act.
AMP shareholders who acquired shares in AMP in the Relevant Period may be entitled to compensation for damages or losses caused to them by AMP’s alleged breaches of the Corporations Act 2001 (Cth).