AMP board members and senior executives may face criminal charges resulting from investigations by the financial services royal commission.
The corporate watchdog ASIC is conferring on the issue with the Commonwealth Director of Public Prosecutions (DPP), which may see charges brought as early as September.
The DPP prosecutes only criminal matters and the fact that ASIC has turned to it means they are considering criminal charges. The issue in question emerged from AMP executive Jack Regan’s admission to the commission that it gave false information to the regulator around 20 times over charging fees for no service to its financial planning clients.
ASIC senior executive Tim Mullaly revealed the news in evidence to Parliament’s Economics Committee on Friday.
“We have concerns around that conduct,” Mr Mullaly told the committee.
In the last month ASIC had been provided with “somewhere around 600,000 documents”, Mr Mullaly said.
When asked how many staff were investigating, he said “probably a bit over half a dozen, and we’ve got external counsel. We’ve been consulting with the DPP in relation to it”.
“I would have thought that we’d be in a position to finalise our aspect of the investigation after September,” he said.
Criminal prosecutions at AMP were raised by counsel assisting the royal commission, Rowena Orr QC, in her summation of two weeks of evidence on financial planning. In “four of the 20 misleading statements, [AMP] may have contravened sections 1308(4) and (5) of the Corporations Act”, she said at the time.
“It is open to the Commissioner to find that those false or misleading statements were material because they would be likely to affect, and appear intended to affect, the manner in which ASIC went about investigating the conduct and the approach of AMP…” Ms Orr said.
Contravention of those those sections can lead to criminal prosecution and fines of up to $180,000. It is not yet clear who would face prosecution if criminal charges are laid.
The commission heard that AMP eventually turned to law firm Clayton Utz to conduct an independent investigation into the misleading of ASIC, with AMP counsel Brian Salter saying in a letter to ASIC: “We are committed to having an open and transparent relationship with ASIC, and that it was in this vein that AMP had produced to ASIC a copy of the Clayton Utz report.”
But Ms Orr called the company out on this.
“The evidence suggests that the description of Clayton Utz’s work as being external and independent may be at least inaccurate, if not misleading.”
In fact AMP had pressured Clayton Utz over the contents of its report.
“Clayton Utz provided AMP with 25 drafts of the report and AMP provided comments on the drafts; AMP and Clayton Utz participated in at least two phone calls, one on 21 September 2017 and the other post 25 September 2017, about the contents of the draft report; employees and officers of AMP, including Mr Regan, Ms [Catherine] Brenner, the [former] Chair of AMP, Mr [Craig] Meller, the [former] CEO of AMP, and particularly Mr Salter, either marked-up or suggested amendments to the draft report,” Ms Orr said.
Ms Orr said in her summation that “the effect of some of those mark-ups or suggestions by Mr Salter appears, on their face, is to limit the findings as to the extent of the knowledge and involvement of the most senior executives of AMP in the impugned ongoing service fee conduct”.
“Following the phone call on 21 September 2017, Mr Meller’s name was removed from the draft report … In an email, Clayton Utz explained that a reason for removing his name was that it would ‘attract unnecessary attention to him by ASIC’,” Ms Orr said.