ASIC’s Mullaly raps ‘very slow’ AMP

AMP stonewalled ASIC over its fee-for-no-service scandal as recently as two months ago, an inquiry has heard.

AMP continued to stonewall an investigation by the corporate regulator into its fee-for-no-service scandal as recently as two months ago and has a long history of failing to co-operate with the Australian Securities & Investments Commission, documents tendered to the financial services royal commission show.

In a letter to AMP’s then-chief legal counsel, Brian Salter, sent on March 14, ASIC’s head of enforcement, Tim Mullaly, said the group’s compliance with the regulator’s demands to produce documents was “less than satisfactory”.

He raised concerns that crucial documents had been kept from law firm Clayton Utz, which AMP had hired to produce an “independent” report into the scandal.

Mr Mullaly also slammed AMP for its failure to co-operate with ASIC in an earlier investigation into life insurance and accused the company of dealing with ASIC in an overly technical way.

The fees-for-no-service scandal, the full extent of which was aired at royal commission hearings a fortnight ago, revolves around a deliberate decision by AMP to charge fees for financial advice customers did not receive.

AMP admits it misled ASIC by initially claiming the rip-off was an administrative error instead of a deliberate practice, but in submissions to the royal commission filed on Friday attempted to downplay the extent to which it led the regulator down the garden path.

An AMP spokeswoman said the company apologised for its regulatory reporting failures.

Mr Mullaly sent the letter after Mr Salter complained to him that ASIC went too far by asking for board documents in a notice to produce issued on January 9.

Mr Salter was aware of the regulator’s scepticism due to an accidental “reply-all” email sent by an ASIC employee following a meeting between it and AMP on October 30 last year.

“Hopefully we get meaningful compliance this time,” the ASIC employee said in the email.

Mr Mullaly told Mr Salter that despite AMP’s promises of co-operation “the investigation team is of the view that AMP’s compliance with notices throughout the course of this investigation has been less than satisfactory”.

He slammed AMP for failing to produce — “until very recently” — material relating to a company committee steering the implementation of Future of Financial Advice laws.

“This material does not appear to have been considered by Clayton Utz in the Clayton Utz report, potentially raising questions concerning the comprehensiveness of their investigation and the accuracy of the conclusions reached,” Mr Mullaly said in the letter.

Mr Mullaly was also concerned about AMP’s failure to cough up documents relating to then-CEO Craig Meller’s oversight of the FOFA project and attacked the company for being “very slow” to produce documents and using “invalid claims of legal professional privilege” or claims of commercial confidentiality to avoid handing over material.

He reminded AMP its behaviour had been poor in a 2016 investigation into another troubled area of the industry, life insurance.

As part of that probe, the regulator interviewed executives using powers in Section 19 of the ASIC Act that nullify the right against giving self-incriminating answers.

“In October 2016, AMP informed ASIC just 24 hours before a scheduled S19 examination that it had only just discovered documents responsive to a S33 notice issued in 2015, and which were relevant to the examination,” Mr Mullaly said. “It appears this occurred because AMP made no attempt to source relevant documents from key custodians from the business when it responded to ASIC’s notice.”