PRIMER , some more good news you missed, AMP only fined $5.175 M...

PRIMER , some more good news you missed, AMP only fined $5.175 M for ripping off their clients, no one is found guilty enough for jail , only the dude Panganiban is banned for life, the other 5 financial planners who did the same thing must have better lawyers because they are not named and presumably back at work.
So we can add that $5.175 M amount to "Group Office costs" for next financial report.


AMP fined $5m for allowing financial advisers to rip off clients

Federal court ridicules company’s defence of just one ‘bad apple’, saying financial services group was ‘the right place’ for greed

Ben Butler

Thu 6 Feb 2020 12.04 AEDTL


 The federal court has fined AMP $5.175m for ripping off clients. The banking royal commission had exposed AMP for allowing its planners to ‘churn’ customers into new insurance policies when there was nothing wrong with the old one. Photograph: Scott Barbour/Getty Images

A federal court judge has blasted troubled financial services group AMP for allowing its commission-hungry financial advisers to systematically rip off clients, ridiculing the company’s defence that there was just one “bad apple” and fining it $5.175m.

In a judgment handed down on Wednesday, Justice Michael Lee found AMP was “the right place” for greed and said it was arguable the penalty – which was more than Australian Securities and Investments Commission (Asic) asked for – was “an inadequate reflection of the seriousness of the conduct” exposed in the case, but the law limited the fine he could impose.

The Asic filed the lawsuit in June last year after the banking royal commission exposed AMP for allowing its planners to “churn” customers into new insurance policies when there was nothing wrong with the old one.

By writing a new policy, instead of continuing the old one or arranging a transfer into a new one, the planners earned large commissions and put clients at a financial disadvantage.

AMP initially admitted 40 clients might have been ripped off in this way but has subsequently identified an additional 626 clients who might have been exploited by their advisers, the court heard.
But no action was taken against him, and he even earned what Lee called a “remarkable” “green 4” rating, the second highest possible, during a routine audit in 2013.

At another routine audit the following year, Panaganiban again earned the second-highest mark available, a “B”.

“One might interrupt the narrative to remark that the mind boggles to envisage what one needed to do to get an ‘E’,” Lee said in his judgment.

He was eventually sacked in September 2014.

A panel made up of senior AMP executives decided that the company did not need to report the issue to Asic, and instead reported Panganiban to the regulator as a “bad apple”.

This was “an exercise in damage control”, Lee said.

“On the evidence before me, in the absence of a proper and thorough investigation, there was no basis, let alone a reasonable basis, for the idea to be conveyed to Asic that there was an isolated ‘bad apple’,” he said.

Asic’s investigation uncovered five other planners who had done the same thing.

Lee rejected AMP’s assertion it made a good faith effort to comply with its legal obligations.

“Although there is no finding of dishonesty by those who should have taken prompt action, their insouciance is striking,” he said.
When managers were warned of Panganiban’s behaviour, “one would have thought alarm bells would have rung (indeed bellowed); as it happens, the lack of an effective response is an illustration of how badly things had gone wrong within the organisation”, he said.

“This was not a case of a ‘rogue’ falling through the narrow cracks of an otherwise well-built compliance system,” he said.

“Panganiban, though undoubtedly a rogue, fell through holes in what may well have been an expensive, but was an inadequately operated compliance system.

“Given Panganiban was evidently motivated by greed, he was in the right place.”

In addition to the fine, Lee found that AMP’s existing program to compensate such clients was inadequate and ordered it to undertake a new program, overseen by the court.

He said the penalty handed down assumed AMP did this properly.

“I will trust, but then verify,” he said.

Asic permanently banned Panganiban from the financial services industry in September 2016
Concerns were raised within AMP about the conduct of one planner, Rommel Panganiban, as early as December 2012.