The AMP Ltd (ASX: AMP) share price is on the slide on Monday.
At the time of writing, the financial services company's shares are down 2% to $1.23.
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Why is the AMP share price falling?
Investors have been selling the company's shares this morning after it released an update on the shareholder class action brought against it by Komlotex in June 2018.
This class action relates to the Financial Services Royal Commission and two significant revelations of misconduct by AMP. These were AMP knowingly charging clients ongoing fees for no service in various contexts, as well as misleading ASIC on repeated occasions when reporting to the regulator regarding its charging of fees for no service.
Law firm Maurice Blackburn commented:
Maurice Blackburn has commenced a class action against AMP, on behalf of shareholders in AMP, for its failure to disclose the market sensitive information above to the ASX. This is alleged to amount to misleading and deceptive conduct and a breach of its continuous disclosure obligations under the Corporations Act 2001 (Cth) and the ASX Listing Rules.
What's the latest?
The good news is that this matter has now been resolved, with AMP settling with Komlotex.
According to the release, the settlement is for a total of $110 million, inclusive of interest and costs. Though, it remains subject to the finalisation and execution of a deed of settlement and approval by the Supreme Court of New South Wales.
In reaching a settlement, AMP advised that it makes no admission of liability.
It also advised that the majority of the settlement amount will be met by available insurance proceeds. As a result, the settlement does not impact the current second tranche of capital return to shareholders. It also remains committed to updating the market on the third tranche of capital return by 31 December 2023.
The AMP share price is still up 10% over the last 12 months.
