AMP has lodged its defence to the shareholder class action led by Quinn Emanuel in the Supreme Court of New South Wales.
The proceeding relates to whether AMP should have disclosed to the market information about the issues highlighted during AMP’s appearance at the Royal Commission hearings in April 2018.
AMP confirms it will vigorously defend this and all similar proceedings.
AMP denies the plaintiff’s allegations that it had information that was required to be disclosed to the market during the relevant period (May 2012 to April 2018) regarding the practice of charging advice fees for no service related to the 90-day exception and ringfencing, and AMP’s interactions with ASIC (including in respect of the Clayton Utz Report).
AMP asserts that any information it had in respect of those matters was not material to AMP’s share price for the following reasons:
Fees for no service: The alleged practice of charging fees for no service in certain circumstances was not material having regard to the number of affected customers (approximately 3,500) or the amount of fees paid for no service (less than $600,000). The practice was ceased and has or will be remediated. It was canvassed extensively during Mr Regan’s testimony on 16 April 2018 without causing any material movement in AMP’s share price on that day.
Misleading ASIC in relation to the nature of charging fees for no service: AMP admitted to certain misrepresentations it had made to ASIC and notified ASIC of those matters in October 2017 when it provided the Clayton Utz Report. Those misrepresentations did not have the effect of misleading ASIC in any material way in respect of the practice of charging fees for no service. ASIC has been conducting a detailed investigation of these matters, which was well advanced at the time the Royal Commission commenced, and had a detailed understanding of the practice. The matters raised at the Royal Commission in respect of the practices were already known by ASIC as a result of its investigations.
AMP’s regulatory dealings with ASIC were confidential and therefore not of a kind that would be expected to be disclosed to the market. Accordingly, AMP had no material information to disclose in respect of its dealings with ASIC.
The mischaracterisation of the Clayton Utz Report: The Clayton Utz Report notes on its face that the Board of AMP appointed Clayton Utz to conduct an investigation independent of AMP’s Advice business. ASIC also knew that Clayton Utz was a member of AMP’s external legal panel and was acting for AMP in relation to ASIC’s investigation of the fees for no service issues. There is nothing about the independence of the Clayton Utz Report that required disclosure. Further, Clayton Utz did not make any changes to the report as a result of communications with AMP which Clayton Utz did not agree with, and Clayton Utz carefully verified the accuracy of the statements in the report.
AMP will return to the Federal Court in Melbourne on 14 August 2018 for the hearing of its application to have the four other class actions transferred to the NSW Supreme Court.