AMP (ASX:AMP) share price on watch after being hit with civil proceedings

The AMP Ltd (ASX:AMP) share price could be under pressure on Thursday after being hit by civil proceedings brought by ASIC…

| More on:
A man holds a law book and points his finger, indicating an accusation or alleged offence to be settled in court

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The AMP Ltd (ASX: AMP) share price will be one to watch closely on Thursday morning.

This follows the release of an announcement this morning.

What did AMP announce?

According to the release, AMP has been hit by civil proceedings brought by ASIC in the Federal Court. This is in relation to alleged breaches concerning the deduction of life insurance premiums and advice service fees from the superannuation accounts of deceased customers.

ASIC further alleges that the AMP companies' conduct demonstrated a system of conduct or pattern of behaviour that was, in all the circumstances, unconscionable.

The release notes that in 2018, AMP identified issues with its processes regarding deceased customer accounts and self-reported this to the regulator. The matter was later covered in the Financial Services Royal Commission.

Since then, AMP has taken action to change its processes and policies to address these issues. It has also remediated all impacted customer accounts. In total, the company has remediated 10,155 customer accounts with a sum of A$5.3 million for the period from 2011 to 2019, which included compensation for lost earnings. The remediation was completed in May 2020.

AMP's Group General Counsel, David Cullen, commented: "AMP has taken this matter very seriously and we will now carefully consider the allegations raised by ASIC. We have been assisting ASIC with its investigation and will continue to engage constructively as part of the legal process."

"When we discovered the issues, we immediately moved to change our processes and systems and took action to ensure the beneficiaries of customers impacted were fully remediated. AMP apologises to all customers and beneficiaries who were impacted by this matter," he concluded.

The AMP share price has been out of form this year. It is down 32% year to date and trading within a whisker of a record low.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Person handing out $50 notes, symbolising ex-dividend date.
Broker Notes

Where to invest $20,000 into ASX 200 shares

Brokers think these shares could be top picks for Aussie investors.

Read more »

The words short selling in red against a black background
Share Market News

These are the 10 most shorted ASX shares

Let's see which shares short sellers are targeting this week.

Read more »

Woman in celebratory fist move looking at phone
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

A female financial services professional with a manicured black afro hairstyle turns an ipad screen to show a client across the table a set of ASX shares figures in graph format.
Share Market News

Record CBA share price and blockbuster merger push ASX 200 financials sector to the top

ASX financial stocks led the 11 market sectors last week with a 1.95% gain.

Read more »

A graphic showing a businessman running up a white upwards rising arrow symbolising the soaring Magellan share price today
Share Market News

CBA Shares in focus: How Australia's most valuable company is using AI to compete

Could AI initiatives drive CBA shares higher?

Read more »

Man jumps for joy in front of a background of a rising stocks graphic.
Broker Notes

These ASX 200 shares could rise 20% to 50%

Looking for big returns? Brokers think these shares could do the job.

Read more »

asx share price represented by cartoon letters spelling the word FOMO
Share Market News

What did Macquarie's "FOMO Meter" reveal about the stock market in May?

Is the market getting frothy or is there still room to climb?

Read more »

Market up or down
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors had a rough end to the week...

Read more »