The fallout from the Royal Commission inquiry into financial misconduct is continuing for wealth management fund AMP, which is currently facing another round of grueling questioning from the Australian Securities and Investments Commission (ASIC).
This latest development has seen ASIC seek out court orders so that it can view documents that it believes that AMP’s law firm, Clayton Utz, has withheld.
Clayton Utz has cited AMP’s legal professional privilege to keep hold of the documents and previously refused to comply with requests to hand them over, but a court order may well force its hand.
AMP is facing accusations of charging customers fees for services that they were not receiving, which was a common trait among major Australian lenders, particularly when involving vertically integrated product structures. ASIC has also accused AMP of misleading its customers with a series of incorrect statements that led them on the wrong path.
The regulator confirmed in a statement that it has ‘applied to the Federal Court of Australia for an order compelling Clayton Utz to produce certain documents, which have, to date, been withheld from ASIC.’
This marks an increase in ASIC’s attempts to unravel what it believes are various policies and management decisions that have undermined trust in the financial sector. Public confidence in the financial industry has dropped heavily since the initial Royal Commission inquiry earlier this year.
Part of ASIC’s current complaint is that it believes that what was supposedly an ‘independent’ report from Clayton Utz into AMP’s operations hampered its efforts to investigate financial misconduct. The regulator is not satisfied with this version of events.
According to revelations from the financial misconduct inquiry, the report was not completely independent due to the fact that Clayton Utz had shown AMP up to 25 drafts of it, suggesting that the fund at least knew what was in the document in advance even if it did not change anything or ask for alterations.
A battle is now set to begin between ASIC and AMP in terms of who gets to see some of the key documents and conversations that previously took place. AMP believes that since Clayton Utz carried out the work ‘on a privileged and confidential basis,’ the notes that came from its efforts are subject to the same claim.
However, AMP noted in a statement that ASIC is challenging this, and a court date has already been set for February 2019. While AMP is considering the regulatory demands, ASIC has said that it wants AMP to waive its rights to hold on to the documents, or the regulator will seek declaration from the court that AMP cannot cite legal professional privilege in this instance. Clayton Utz said that it will comply with whatever decision the courts hand out.
The continuation of ASIC’s investigation means that there is not yet an end in sight for AMP. One of the fund’s current executives, Anthony Regan, has confirmed that he is retiring. Regan previously admitted that the company mislead ASIC ‘at least 20 times,’ a figure that AMP has disputed.