A fourth class action is being lined up against financial services giant AMP, as boutique law firm Phi Finney McDonald and funder IMF Bentham join forces on behalf of AMP investors.
As reported by The Adviser sister title Mortgage Business, several law firms have revealed that they are investigating class actions on behalf of AMP shareholders on the grounds that the company breached its obligations to customers and engaged in “misleading and deceptive representations to the market”.
The legal action comes after 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 and suggesting that these were repeatedly mischaracterised to the Australian Securities and Investments Commission (ASIC) and to its customers as being “administrative errors”.
These included providing false and misleading statements to the regulator and charging customers for services that were not provided.
The ASX-listed lender, which recently announced the immediate resignation of its CEO and apologised “unreservedly for the misconduct and failures in regulatory disclosures”, has lost more than $1 billion in shareholder value since March and could potentially face criminal charges.
Speaking of the potential class action, Phi Finney McDonald director Tim Finney said: “It is all very well for AMP to say that it ‘unreservedly’ apologises to the regulator, but where does that leave investors in AMP shares who have seen billions of dollars wiped off AMP’s market capitalisation in the last two weeks?
“Australians are appalled by stories emerging from this royal commission.
“AMP’s conduct, possibly criminal in nature, is the worst of a bad bunch.”
Mr Finney said that the action would seek compensation for investors who acquired shares in AMP between 24 May 2013 and 13 April 2018.
“ASX-listed companies need to properly compensate their investors when their misleading conduct causes them loss,” Mr Finney said.
“This class action will be open to all shareholders aggrieved by AMP’s misconduct.”
IMF investment manager Ewen McNee commented: “Following a comprehensive due diligence and investment committee process, IMF Bentham’s team of highly experienced litigation experts are satisfied there is evidence that AMP has breached its obligations and engaged in misleading and deceptive representations to the market.
“IMF’s competitive funding terms for this class action will be well received by investors.”
The litigation funder is also currently funding a class action against the Commonwealth Bank of Australia in relation to alleged contraventions involving “engaging in misleading or deceptive conduct and/or breaching continuous disclosure obligations in relation to its non-compliance with the AML/CTF Act”, which IMF Bentham said is “information that a reasonable person would expect to have a material effect on the price or value of CBA shares”.
[Related: Bank chairman steps down as scandals unfold]
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