Recovering Financial Losses From The Woodford Equity Income Fund

The winding up of the Woodford Equity Income Fund and the closure of Woodford Investment Management last year understandably had a significant financial impact on those who had invested in the Fund, leaving many of them seeking legal advice.

Questions have since been asked of the platforms and financial advisers that recommended investment in the Fund and whether they were acting in their customers’ best interests by doing so.  Questions have also been raised about what actions were taken by those responsible for having oversight of the management of the Fund.

Woodford Fund and compensation claims

Hargreaves Lansdown

At Nelsons, the initial focus of our investigations for clients has been in respect of Hargreaves Lansdown and their seeming unwillingness, despite mounting negative data, to remove the Woodford Equity Income Fund from their best buy lists, the Wealth 150 and later the Wealth 50.

We have a cohort of clients who have suffered substantial losses after relying on these lists when making investments into the Woodford Equity Income Fund. We are finalising our investigations with a view to advancing claims against Hargreaves Lansdown.

Link Fund Solutions Limited

However during our investigations, significant questions have arisen with regards to the part played by Link Fund Solutions Limited who were and are the Authorised Corporate Director (ACD) of the Woodford Equity Income Fund. They have previously dismissed complaints by simply saying that they had:

“at all times acted in accordance with applicable rules and in the best interests of all investors”.

As ACD, Link Fund Solutions had a fiduciary role and a regulatory obligation to ensure that the Woodford Equity Income Fund was run in the best interests of investors ensuring that they were protected and treated fairly. They were required to adhere to the FCA’s Principles of Business and the rules set out in the collective investments schemes sourcebook of the FCA Handbook.

Events leading up to the suspension of the Woodford Equity Income Fund revealed that the Fund’s holdings in a number of unquoted companies in the portfolio had been listed on The International Stock Exchange in Guernsey allowing Neil Woodford to maintain a heavy weighting to highly illiquid companies far in excess of the 10% dictated by the Fund’s rules and by regulatory requirements. Link Fund Solutions were involved in the decision to designate The International Stock Exchange an eligible market for these purposes which allowed the initial listings of the shares to take place.

We are looking at whether such decisions were indeed in the best interests of all investors or whether it could be said that investors were let down and treated unfairly by Link Fund Solutions’ apparent failure to address at a much earlier stage the substantive issue of the increasing illiquidity in the Fund.