(Reuters) - Australia’s Federal Court has ordered wealth manager AMP Ltd (AMP.AX) to pay a penalty of A$5.2 million ($3.5 million) for failing to prevent incorrect insurance advice by financial planners, the corporate watchdog said on Wednesday.
AMP is battling to steady itself a year after a public inquiry into the finance sector accused it of improperly charging fees and attempting to deceive regulators.
In June 2018, the Australian Securities and Investment Commissions accused reut.rs/372nwmu the firm’s financial planners of advising clients to cancel existing insurance policies and apply for new similar replacement policies, so as to win higher commissions.
“This penalty proceeding reflects a lamentable failure of corporate will to take the necessary steps to prevent greedy and unlawful conduct,” the court said in its judgment, which also faulted the firm’s lack of a swift and proper remedial response.
AMP admitted to the case against it in May last year.
The court is to order a review and remediation program by AMP to ensure proper compensation for the affected clients, it added.
Reporting by Niyati Shetty in Bengaluru; Editing by Clarence Fernandez