AMP’s ASX-listed scrip was dumped on Wednesday after a Federal Court decision potentially exposed the company to a raft of compensation payouts to aggrieved financial planners affected by controversial changes to its buyer of last resort program. In August 2019, AMP announced plans to rationalise its aligned planner network through the buy-out of businesses owned by around 800 financial advisers. While buying out retiring advisers was a longstanding practice in the AMP wealth business, the August 2019 announcement was controversial because AMP also said that it would slash the earnings multiple for calculating the purchase valuations. Under the buyer of last resort program AMP typically paid planners four times earnings for their advice businesses, but that was to be reduced to a multiple of 2.5. That move triggered a class action and a test case was heard last year in the Federal Court in Melbourne before Justice Mark Moshinsky. On Wednesday Justice Moshinsky published his judgment, which found AMP Financial Planning Pty Ltd had committed a breach of contract in relation to a financial advice firm leading the class action known as Equity Financial Planners Pty Ltd. Justice Moshinsky found that Equity Financial Planners suffered loss and damage as a result of AMPFP’s breach of contract and was entitled to A$813, 560 in damages. Another party joined to the claim, WealthStone Pty Ltd, was also successful, with the court awarding it damages of more than $115,000. Trading in AMP shares was paused ahead of the opening of the ASX but later resumed after the company notified the market of details of the judgment. It is not yet clear whether AMP will appeal the court judgment or commence a process to compensate other previously aligned financial planning groups that supported the class action. “The Court has today ruled in favour of the claims of the lead applicant and sample group member,” AMP said in an ASX filing. “The Court accepted evidence of the loss incurred by the two group members, being the lead applicant (Equity Financial Planners - $813,560) and the sample group member (Wealthstone - $115,533).  “The Court determined amounts payable to the lead applicant and the sample group member only.  “Subject to any appeal, a process will be required to determine the impact of the decision on other group members.  “Noting the complexity of the matter, AMP is reviewing the judgment in detail to determine the full effect of the judgment and its next steps. “AMP will provide an update in due course.” The Federal Court decision appeared to rattle investors who hammered AMP’s share price down by more than 6 per cent to $1.07.