AMP settles Royal Commission class action
AMP has reached an agreement to settle the shareholder class action brought by Komlotex in June 2018 following the Hayne royal commission.
The settlement is for a total of $110 million, including interest and costs, and is subject to the finalisation and execution of a deed of settlement and approval by the Supreme Court of New South Wales.
The bank makes no admission of liability and announced that the majority of the settlement amount will be met by available insurance proceeds.
Maurice Blackburn Lawyers filed a class action on 7 June 2018 on behalf of AMP’s shareholders arising from revelations at the financial services royal commission of systemic misconduct at AMP.
“This settlement does not impact the current second tranche of capital return to shareholders and we remain committed to updating the market on the third tranche of capital return by 31 December 2023,” AMP said in a statement.
The bank was subject to examination by the royal commission from 16 April 2018 for knowingly charging clients ongoing fees for no service in various contexts and misleading ASIC on repeated occasions when reporting its charging of fees since May 2015.
Maurice Blackburn commenced the class action against AMP for its failure to disclose the market sensitive information to the ASX.
According to the law firm, AMP’s share price fell by approximately 11 per cent during the first week of the class action.
Catherine Brenner, ex-AMP chairman, and Craig Meller, former AMP chief executive, resigned from their positions alongside two other directors who stood down.
Earlier this year, the Federal Court ruled in favour of another class action relating to buyer of last resort (BOLR) proceedings by AMP.
Justice Mark Moshinsky ruled in favour of the class action group on 5 July, finding that the changes made by AMP with immediate effect were not authorised under the legislative, economic or product (LEP) provisions and “were ineffective”.
Lead applicant Equity Financial Planners is entitled to damages in the sum of $813,560, while sample group member Wealthstone is entitled to damages in the sum of $115,533.51. There will be a further process to determine the impact on other group members.
AMP is currently deciding whether it will appeal the BOLR verdict and is expectant of an update from the Federal Court later this month.
It also has two more class actions relating to superannuation, which have been consolidated into one covering the period between July 2008 and September 2019. These relate to fees charged to members of certain AMP super funds and fees charged to members and interest rates received and fees charged on cash-only fund options.
“The AMP respondents have filed defences to the proceedings. The claims are yet to be quantified and participation has not been determined. Currently, the potential outcome and costs associated with the matter remain uncertain. The proceedings are being defended,” it said.
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Another day, another AMP class action!