A global law firm says it will file a class action within two weeks against financial services giant AMP, which has admitted to cheating customers and lying to the corporate regulator.
Quinn Emanuel Urquhart & Sullivan says it has been investigating an action against AMP since early March, when the company’s shares began falling to their current low level.
AMP has shed more than $1 billion in market value since its executives began giving testimony to the royal commission last week, and were down a further 2.6 per cent to a near-six-year low of $4.19 by 1550 AEST on Monday.
The 169-year-old company last week admitted it had charged customers fees for financial advice that was never delivered, and then repeatedly lied about its behaviour to the Australian Securities and Investments Commission (ASIC).
The wealth management giant faces possible criminal charges after the commission heard it deliberately and unlawfully continued charging fees to “orphan” clients – those who no longer had an adviser – for three months despite them not receiving any service.
Quinn Emanuel is the largest law firm globally dealing with business litigation and arbitration, according to its website, and has already secured the backing of litigation financer Burford Capital.
Quinn Emanuel partner Damian Scattini said the action should be ready to file within the next fortnight.
He said the evidence heard on AMP’s misconduct was “especially upsetting” to ordinary mum and dad shareholders.
“They (companies) have an obligation to be upfront with the market about things that are going on in the business,”Mr Scattini said on Monday.
“It is very discouraging when it turns out you have been lied to for years.”
The global law firm is urging shareholders who acquired stock between May 2013 and April 2018 to register their interest.
AMP has declined to comment on the class action.
On Friday, chief executive Craig Meller resigned following the scandal, saying he was “personally devastated” after learning of behaviour that may yet result in staff facing criminal charges.
AMP then said it was withdrawing a proposed equity bonus for Mr Meller, who had been set to retire at the end of the year, and that former IAG chief executive Mike Wilkins will step in as interim CEO.
AMP and the nation’s big four banks have already paid almost $219 million in compensation to more than 310,000 financial advice customers charged fees for no service.