CLASS ACTIONS WORST CASE SENERIOS PRIMER, page-96

SHAREHOLDER CLASS ACTION CASE COMPARISON IFL/AMP

The class action came in light of the Hayne Royal Commission, which highlighted serious misconduct and deception among the financials sector. IOOF was accused of engaging in misleading and deceptive conducting resultingin shareholders over-valuing company shares.

The company’s shares declined in value by a hefty 35 per cent in just one day when accusations from the Australian Prudential Regulation Authority (APRA) went public.

The class action claimed the company was well-aware of the consequences of the financial watchdog investigation, but never disclosed the information to shareholders.

From 16 April 2018, AMP was the subject of examination by the Financial Services Royal Commission. During the course of this, two significant revelations of misconduct by AMP were the focus:

1.For a number of years, AMP had knowingly been charging clients ongoing fees for no service in various contexts

2.Since 27 May 2015, AMP misled ASIC on repeated occasions when reporting to ASIC regarding its charging of fees for no service.

Since these revelations, the fallout for AMP has been considerable. The market strongly reacted and by the first week, AMP’s share price had fallen by around 11%. Both Catherine Brenner(ex-Chairman) and Craig Meller (ex-CEO) resigned from their positions and two other directors stood down.

IFL misleading and deceptive conducting resulting in shareholders over-valuing company shares.

AMP AMP had knowingly been charging clients ongoing fees for no service in various contexts
AMP misled ASIC on repeated occasions when reporting to ASIC regarding its charging of fees for no service