This article is more than 2 years old

This article is more than 2 years old

Australia’s largest wealth manager, AMP, could face criminal charges for lying to and misleading the regulator about charging customers for advice they never received.

The banking royal commission was told the attitude at a very senior level within AMP was that it was acceptable to be other than frank and candid with the corporate regulator.

AMP and its advice businesses misled the Australian Securities and Investments Commission 20 times between 2015 and 2017 about the nature and extent of its fees for no service practice.

AMP also gave Asic a supposedly independent report with changes apparently designed to limit any findings of the knowledge and involvement of the company’s most senior executives, the royal commission was told on Friday.

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The scandal has already claimed the job of the AMP chief executive, Craig Meller, and could lead to the company facing criminal prosecution if royal commissioner Kenneth Hayne QC adopts the suggestions of barristers assisting the inquiry.

Senior counsel assisting the commission Rowena Orr QC has outlined a series of possible misconduct findings against AMP, including breaches of the Corporations Act that carry criminal penalties.

“Through AMP’s dealings with Asic regarding the extent and nature of its fee for no service conduct, AMP adopted an attitude toward the regulator that was not forthright or honest, and demonstrated a deliberate attempt to mislead,” she said on Friday.

AMP made deliberate decisions to continue charging clients fees for no service despite attempts by more junior staff to convince senior management of its advice businesses to stop the practice, the inquiry heard.

Orr said Hayne could also find there was misconduct in relation to what AMP described as an external and independent report by Clayton Utz on the issue, which went through 25 draft versions with changes from the company.

Orr also told the hearing AMP employees or officers, including Meller, chairman Catherine Brenner, advice executive Jack Regan and particularly general counsel Brian Salter, either marked up or suggested amendments.

“The effect of some of those mark-ups or suggestions by Salter appear, on their face, to be 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,” Orr said.

She said the board of AMP may have approved the changes to the Clayton Utz report before it was submitted to Asic in October last year.

“Having regard to the changes made to the report, there is a reasonable basis for concluding that AMP, by one or more of its senior employees or officers, knew that the representation that the report and the findings made within it were entirely independent was materially incorrect,” Orr said.

“It is open to the commissioner to find that it reflects an absence of a compliance culture and a persistent and prevalent attitude at a very senior level within AMP, that it is acceptable to deal with ASIC other than frankly and candidly.”

AMP last week apologised for the misconduct as it announced Meller had stepped down and Salter had taken leave pending a review of its regulatory reporting and governance processes.