Finance titan AMP may face criminal penalties

UNDER-SIEGE financial advice giant AMP could face criminal charges for misleading the corporate cop over a decade-long scandal in which it charged customers for services they never received.

AMP chief Craig Meller last week lost his job over the scandal, and Treasurer Scott Morrison has floated the possibility of criminal charges.

Yesterday Rowena Orr, counsel assisting the royal com- mission into financial services, told commissioner Ken Hayne he could find AMP had contravened the Corporations Act, which could indeed lead to criminal penalties.

She said this stemmed from AMP making “false or misleading statements” to corporate cop the Australian Securities and Investments Commission, as it probed the AMP charging clients ongoing service fees, despite not having a planner assigned to them.

It is understood criminal charges would be against the company and not individuals, although sources say the ongoing investigation could lead to charges against some, with fines of up to $210,000.

Ms Orr said senior AMP executives had manipulated a report which was then presented to the ASIC as independent.

AMP chair Catherine Brenner, chief Craig Meller, counsel Brian Salter and head of advice Anthony “Jack” Regan “either marked up or suggested amendments” to the draft re- port prepared by Clayton Utz, she said.

AMP had 25 drafts of the report. And it misled ASIC 20 times about its efforts to address the “fees for no services” issue.

Ms Orr said four of the 20 misleading statements to ASIC could have contravened two other sections of the Corporations Act relating to false or misleading documents.

“The senior management and executives who contributed to the misleading of ASIC over the two-year period had know- ledge of the extent and nature of the conduct and were warned by junior staff about it, but continued,” she said.

The “fees for no services” started in 2007 and AMP discovered it in 2008 — but only ended it eight years later.

AMP yesterday acknowledged the seriousness of the closing submissions.

“We are reviewing them closely and will respond fully next week,” it said. AMP shares hit a six-year low of $4.02, dropping 0.7 per cent.