Federal Court Ruling Deals Blow to Australia’s AMP as Shares Plummet in Class Action Proceedings

Asian Trade TVJuly 5, 2023

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Australia’s AMP (OTC:AMLTF) Ltd took a massive hit on Wednesday as the federal court ruled against the wealth manager in class action proceedings. This legal battle revolved around the validity of certain changes made to its ‘buyer of last resort’ policy. The verdict sent shockwaves through the market, causing the company’s shares to plummet by a staggering 7.5%, marking their lowest point in over a month. In fact, AMP even claimed the unfortunate title of being the top loser on the benchmark index, which was down 0.4%.

Let’s delve into the heart of the matter. Back in August 2019, AMP decided to tinker with its ‘buyer of last resort’ policy. They sat down with their financial planners and renegotiated the terms, aiming to reduce the amount they would pay these planners for their businesses when retirement beckoned.

Fast forward to Wednesday, when the court finally reached its decision. It determined that Equity Financial Planners, the lead applicant in the class action, should receive a sum of A$813,560. As for Wealthstone, a sample group member, they were awarded A$115,533. These figures represent the amounts payable based on the court’s ruling.

Naturally, AMP acknowledged the court’s verdict. They recognized that a thorough evaluation is necessary to gauge the impact of this decision on other group members involved in the class action suit, assuming no appeal is made.

Given the complexity of the matter at hand, AMP now finds itself poring over the judgment with a fine-tooth comb. They aim to ascertain the complete ramifications of this ruling and determine the best course of action moving forward.

To say that this ruling has left AMP in a precarious position would be an understatement. The implications are far-reaching, and the company must now navigate a challenging path ahead. The twists and turns of this legal saga have introduced an air of uncertainty, leaving AMP to grapple with an unknown future.

As investors and observers absorb this news, it’s only natural to wonder what lies ahead for AMP. Will they rebound from this setback, or will they face further obstacles down the line? AMP finds itself at a crossroads, and only time will reveal the true impact of this court ruling on their journey.