The Supreme Court of New South Wales (NSW) recently approved a $100 million settlement between financial services giant AMP and its shareholders over allegations of misconduct. Over 18,700 investors were notified of the multimillion-dollar settlement and given the chance to raise concerns after the class action reached the settlement. The members of the class action will each receive a portion of the settlement amounting to over $82 million, with Maurice Blackburn receiving over $26 million in legal costs. The two lead plaintiffs will each receive $32,000.
AMP was accused of charging shareholders fees while providing no services and misleading the Australian Securities and Investment Commission (ASIC) with respect to the charges it was levying for services it was not providing. These matters had been “hotly contested” by the financial firm. The financial services giant has also argued that share prices could have suffered based on any reputational damage if it had disclosed its charging policy and that it did not have to disclose information about its advisory fees to the market.
Following the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, former federal Treasurer Josh Frydenberg said that misconduct in the financial sector “must end” and that the “interests of consumers must now come first.” The 2018 Royal Commission found four findings of either law-breaking or falling short of community expectations, and ASIC has since made 32 investigations as of May 2023.