The royal commission into banking misconduct has recommended AMP should face criminal prosecution for misleading the corporate regulator.
Senior counsel assisting the commission Rowena Orr, QC, said AMP had breached criminal provisions for misleading the Australian Securities and Investments Commission by charging clients fees for no service.
In handing down her preliminary findings, Ms Orr told the royal commission that AMP made a business decision in 2013, or earlier, to deliberately charge customers for service that Ms Orr said “it knew it could not and would not provide”.
Ms Orr said AMP executive Jack Regan admitted it “was both unlawful and ethically and morally wrong”.
AMP has also been recommended for criminal charges for presenting to ASIC a report by Clayton Utz as independent, despite making the law firm change the report 25 times. The charges were recommended under 1308 (2) and 1308 (3) of the Corporations Act which deals with misleading statements to ASIC.
Ms Orr also recommended AMP be charged for breaching Section 64 of the ASIC Act, which is a criminal breach.
The commission’s recommendation came after Treasurer Scott Morrison suggested AMP and its executives be recommended for criminal charges.
The royal commission heard that AMP misled the Australian Securities and Investments Commission 20 times about its lack of issues with fees for no service.
Ms Orr said it was open to the royal commission to find AMP had made material breaches under 1308 (4) and 1308 (5), which both carry criminal penalties. Companies can be fined as much as $1 million for each breach.
Ms Orr also invited Commissioner Kenneth Hayne to find that the Commonwealth Bank of Australia had breached its financial licence provisions, the Corporations Act by not reporting its fees for no service issues to ASIC for two years.
The law requires all licence holders to report significant breaches to the regulator in 10 days.
These breaches included CBA charging dead clients fees for services. CBA, referred to by the royal commission as the gold medallist of fees for no service, has so far confessed to charging tens of thousands of clients $119 million in fees for services they did not receive.
Ms Orr also said it would be open for the commission to find that the Commonwealth Bank’s Colonial First State had breached the Corporations Act for charging investment platform fees inappropriately.
Ms Orr added that AMP may have breached its duty to provide fair, honest and efficient services when failing to move customers out of its platforms.