Business Ethics in AMP Limited

Running head: Business Ethics in AMP Limited
Comparative Business Ethics and Social Responsibility
Essay
System04104
1/29/2019

Business Ethics in AMP Limited
1
Main Article and Reference
SBS News (2019) Banking sector crackdown hits parliament [online]. Available from:
https://www.sbs.com.au/news/banking-sector-crackdown-hits-parliament [Accessed:
29/01/2019].
Introduction
This article is about the Australian Banking royal commission. The royal commission refers
to the misconduct and fraud into the banking organisation or in any other financial service
industry is also known as the Banking royal commission. The current article talks about the
decisions of Australian government about the banking and financial frauds and misleading
Australian people and also misuse of people’s investments by the Australian Banks especially
AMP bank. The current article supports the punishment and increases the penalties for both
individuals and corporations for misconduct in the financial sector. The federal parliament
increases the punishment and boosts it up to 10 years under the drafted laws introduced to the
federal parliament in Australia (SBS News, 2019). The focus of this article is on the unethical
practices of AMP Limited.
Summary of Article
The current article is about the punishment and boost in the penalties about the financial
fraud in Australia. The new banking law regarding banking services and frauds in financial
sectors has been announced in Australia on October 24, 2019. It includes strict rules and
regulations regarding the financial and banking frauds. The law boosted the civil penalties for
individuals by more than five-fold ($1.05 million fine) and ten-fold ($10.5 million fine) for
corporations after finding them guilty in financial frauds (William, 2018).
This incident was taken place in the Australian banking industry when AMP limited which is
a financial company in Australia and New Zealand providing superannuation and investment
products, insurance, and financial advice and banking products including distributing loans
and savings accounts. Apart from AMP Limited, some other major banks of Australia such as
Westpac bank and ANZ were also involved in such scenario (Atkinson, 2018). These banks
are caught by banking investigation agencies for doing fraud, mislead people like charging
fees for no service, doctoring so-called independent reports, lying to the regulators and so it
goes on, showing fraud in their fund utilization, and misuse the investment funds of people.

Business Ethics in AMP Limited
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These acts of the banks adding the negative sentiments around the banking sector from the
“ethical investing sector.” The Royal Commission has highlighted serious misconduct in the
banks including bribery, cheat, fraud, and unethical practices with people and investors
(Ryan, 2019). This caused people lost interest and their trust of banks in Australia (The
Business Times, 2018). However, the problem is that the unethical practices of AMP limited
went all the way to the boardroom. The pressure of Royal commission forces the AMP
Limited to think about it reputations and also it causes them to rethink about their strategy to
not selling its stake.
Key ethical Issues/concerns
AMP was doing totally unethical practices with both people and with its investors. They also
misguide their higher regulatory body by doing fraud in funds and investment. The financial
services royal commission has found that AMP involved in systemic prudential and cultural
issues. The commission found that these issues were not happen accidently neither these acts
were isolated incidents, rather it was deliberate and planned acts of banking and financial
institutions especially by AMP limited. It was also found by the banking royal commission
that senior executives if the AMP were also involved in the misconduct. It was also found
that the staff of the company were fully aware and having knowledge that their actions were
against the law and breaches of their licensee duties. AMP was one of the famous finance
company in Australia, these incidents affect their image, and that lead to a downfall in their
share prices in Australian and the New Zealand sharemarkets (Landmann and Hess, 2018).
These frauds of the companies lead t lost in trust and faith of Australian people and thus they
disinvested their money from the bank and shareholders sell their stake even on low prices.
Thus, the market value of AMP shares was down day by day.
Legality In decision-making
The federal court of Australia ensures a strict punishment about the fraud and misconduct of
banking corporations. However, company and other regulatory bodies failed to stop these
organisations from doing fraud with the customers and Australian people. Banks were
charging additional money for the services they were providing to their customers and
investors. Although, when they detected by authoritative bodies and Australian royal banking
commission they were found guilty and also accept that they were doing this in full
knowledge of top executives and even staff knew these things a well (Robertson, 2018).