Just before a 15-day trial was set to commence in the NSW Supreme Court, AMP and the class action backed by Maurice Blackburn reached an agreement, thus concluding their five-year legal battle.
Class action barrister Cameron Moore SC announced in court on Monday, "I'm pleased to announce that this matter has settled."
The Genesis of the Lawsuit
The lawsuit was originally filed in June 2018 following AMP's disclosure of systemic misconduct during the banking royal commission held the same year. The accusations involved charging fees to customers who did not receive any services and withholding this information from the Australian Securities and Investments Commission.
These revelations led to a significant decline of approximately 11 percent in AMP's share price, prompting shareholders to initiate the class action against the financial firm. Their claim argued that the corporation should have been more transparent about its misconduct, resulting in shareholders purchasing shares at an inflated price.
The Fallout
In the aftermath of the royal commission, both AMP's chairman Catherine Brenner and CEO Craig Meller resigned from their positions.
In an ASX announcement on Monday, AMP clarified that the majority of the settlement amount would be covered by its insurance policy. Additionally, the company emphasized that this settlement does not imply an admission of liability on its part.
The settlement will not impact the expected capital returns for current shareholders this year, according to AMP.
Next Steps
Justice Michael Ball adjourned the matter until September 5, granting the parties time to finalize the details for a settlement approval hearing. This hearing could take two to three months.
Before any remaining funds are distributed to shareholders, Justice Ball must approve the total settlement amount as well as address any legal fees requested by Maurice Blackburn.
