Banking royal commission: three lawsuits looming for AMP

Wealth management firm AMP is facing the threat of three separate class-­action suits in the wake of the royal commission.

AMP head of advice compliance Sarah Britt yesterday. Picture: Stuart McEvoy

Scandal-hit wealth management firm AMP is facing the threat of three separate class-­action suits in the wake of revelations of ­misconduct at the royal com­mission.

Class-action specialists Slater & Gordon, Queensland-based Shine Lawyers and global law firm Quinn Emanuel Urquhart and Sullivan all announced ­yesterday they were poised to pursue the $12 billion ASX-listed AMP over the company’s ­alleged withholding of information from investors.

AMP declined to comment on the announcements.

Revelations at the financial services royal commission have already carved $1.85bn off the company’s market capitalisation and prompted the early exit of chief executive Craig Meller.

Shares in the company fell a further 3 per cent yesterday, and the stock has now lost a quarter of its value since early March.

Finance Minister Mathias Cormann yesterday admitted the government should have ­established a royal commission into the banking industry sooner, going further than Malcolm Turnbull and Scott Morrison who would concede only to a political error in waiting so long to launch the inquiry. “With the benefit of hindsight, we should have gone earlier for this inquiry,” Senator Cormann told Sky News from Berlin.

Yesterday, the commission heard evidence that AMP was still to inform victims of shoddy financial advice that they had lost money, having kept them in the dark for years. They include clients of planner Adam Palmer, who did not tell his customers he owned 60 per cent of a business, Property Saint, to which he referred them to buy property.

The commission heard that AMP terminated Mr Palmer’s authorisation to act as its representative 3½ years ago but has yet to review all his client files.

Hundreds of people who are clients of another two allegedly shonky planners are in the same situation. The commission heard that AMP’s remediation team could not handle the large workload created by so many people needing to be compensated.

Mr Palmer, who owns Victorian thoroughbred farm Princess Park and runs racing-focused business networking event Final Field, could not be reached yesterday.

Australian Securities & Investments Commission records show he remains registered as a financial adviser with smaller advisory Dover.

AMP’s head of advice compliance, Sarah Britt — speaking about customers of one of the planners, who the commission has given the codename “Mr E” — admitted the company had not moved quickly enough. “I don’t think we can argue that we’ve been timely, given we still haven’t contacted them,” she told the commission.

Yesterday’s evidence came on top of AMP’s admission to the commission last week that it charged clients fees for services they did not get and misled the corporate regulator about it 20 times. The commission also heard evidence that the company manipulated a supposedly independent report into the debacle, commissioned by AMP’s board.

Chairwoman Catherine Brenner is facing pressure to step down for her role in the doctored report, while AMP group counsel Brian Salter has been forced to take leave. Many of the largest institutional shareholders in the country are pushing for a board overhaul.

Law firm Quinn Emanuel Urquhart and Sullivan said it would be ready to file a shareholder class action against the finance group within 10 days. Slater & Gordon principal lawyer Mathew Chuk said his group was “closely investigating” AMP’s potential liability to its investors, which could be one of the biggest class actions in Australian history.

Shine Lawyers also said it was investigating a class action.

The Quinn Emmanuel suit will be run on an open-class basis, meaning all eligible investors will participate in it even if they do not sign up to a funding agreement.