AMP is set to face legal action by the end of this year as the Australian Securities and Investments Commission put a deadline on enforcement and revealed it had at least five active investigations into the troubled wealth giant.
ASIC deputy chair Daniel Crennan told the federal government’s economics committee on Wednesday there were a “significant number of matters” the corporate cop was probing within AMP.
When pressed on the scale of these investigations, Mr Crennan said, “more than five, less than 50. Significantly less than 50”.
AMP has faced a fresh list of scandals this year as it battles four class actions and was forced to defend the appointment of money manager Boe Pahari to chief executive of AMP Capital after he was fined $500,000 for sexually harassing an employee.
Labor Senator Deb O’Neill has also called on ASIC to investigate whether changes to long-standing arrangements with current and former aligned advisers could have broken the law.
However, the coronavirus pandemic has made it impossible for the regulator to conduct face-to-face interviews to probe new allegations of misconduct so any legal action against AMP would likely centre on revelations from the banking royal commission, including charging fees for no service.
AMP declined to comment on the pending legal action but said it would help ASIC with any investigations.
The warning of legal action came as ASIC’s deputy chair Karen Chester said she was disappointed with how long it was taking the financial sector to pay back wronged customers.
“We do think there are opportunities for the banks and other financial services firms to do a much better on [remediation], not just in terms of the timeliness but also setting things right,” Ms Chester said
Workplace culture needed to be improved so that systemic misconduct could be identified, reported and compensated in a more streamlined fashion, Ms Chester said.
“The longer it takes these institutions to identify these problems early on and the delay then in realising there is a systemic problem … means that remediation becomes a slow, long legacy to be paid,” Ms Chester said.
ASIC is overseeing 89 remediation programs involving 100 licensees. Of those, $828 million had been returned to customers and the regulator expected a further $2.9 billion to be paid to more than 2 million customers over the next 18 months.
Charlotte is a reporter for The Age.