Recent Developments (updated 1st June 2023)
Recent announcements relating to Woodford Equity Income Fund (WEIF) warrant close attention:
- The FCA has announced a potential £235 million settlement with Link Financial Services (LFS)
- The settlement, if approved by WEIF investors, will be used to pay redress
- The scheme, if approved, will protect LFS from further claims
The FCA is effectively urging investors to approve the scheme and is stating that legal redress claims promise an unrealistic return since FSCS compensation would not cover investment losses. This statement is confusing, since the redress claims are claims for damages, not for investment losses.
The regulator underlines that its scheme will result in a 77% recovery for WEIF investors versus the NAV held at the point of the fund’s suspension in 2019. It signally fails to point out that 71% of that recovery has been from asset sales, and that the scheme will cover just 6% more, less than a quarter of the £1 billion lost by investors since the suspension.
There appears to be a fundamental conflict between the FCA’s role in protecting consumers and its apparent desire to avoid creating a claim on the FSCS, which would ultimately be borne by the financial services industry via the FSCS levy.
One positive note is that the regulator continues to investigate other parties to this mess, suggesting that there may be further action to come from the FCA in due course.
What is clear is that the FCA scheme is problematic for the legal redress schemes. Some of these are effectively focused only on the LFS action, while others have a second or third string to their bow, such as Hargreaves Lansdown and possibly even Northern Trust.
The law firms are taking stock, and Leigh Day has now closed its claim to new applicants. Accordingly, our endorsement of that claim is no longer relevant and has been withdrawn.
At this stage, it is prudent for affected investors to await further information from the FCA.
ShareSoc invites everyone concerned about Woodford, particularly investors in the LF Woodford Equity Income Fund (WEIF), the LF Woodford Income Focus Fund (WIFF), Woodford Patient Capital Trust plc (WPCT) and Hargreaves Lansdown Multi-Manager Funds (MMF), to join the ShareSoc Woodford Campaign .
Many individual investors lost money as a result of the dramatic loss in value of assets within investment vehicles managed by Woodford Investment Management Limited, as a result of the apparent failure of the manager and authorised corporate director to adhere to regulatory restrictions, and as a result of the resulting fund suspension and liquidation.
ShareSoc is keen to identify recourse routes open to affected investors, to ensure that the events which harmed individual investors are properly examined, and to press for changes in regulations and regulatory enforcement that will improve standards and accountability.
We are pleased that multiple legal initiatives surfaced with the intention of investigating the matter and of seeking redress.
Campaign members receive updates from ShareSoc, and can participate in the Campaign Forum to exchange views with other investors. Membership of the campaign is not limited to Woodford investors.
Further details about our campaign are in the sections below:
- Latest Updates
- A Note of Caution
- The Leigh Day Claim
- ShareSoc’s Endorsement of the Leigh Day Claim
- Join the Leigh Day Claim
- Join the ShareSoc Woodford Campaign
- Campaign Members’ Forum
- Press Coverage
- Make a donation to ShareSoc to support our Campaigning Activities
Our campaign objectives are to:
- facilitate communication between Woodford investors
- help affected Woodford investors recover their losses where possible
hold to account those who contributed to those losses through action or inaction
- improve the way regulators regulate
Our primary aim is to provide information and facilitate communication in order to assist investors in gaining compensation for losses suffered, where we believe there is a reasonable opportunity for them to do so.
ShareSoc also believes that the actions and inactions of those involved in the scandal should be properly examined and that there should be clear consequences for any failure to exercise proper care in the management and administration of individual investors’ money.
The Woodford scandal also raises questions about consumer education and about the structure of funds holding less liquid assets, how they are marketed, and the roles and responsibilities of the various parties involved.
ShareSoc will also be campaigning to change the regulations and/or the way the regulator enforces the regulations, to ensure this type of scandal does not happen again.
– 1 June 2023 Update 12 following FCA announcement of proposed settlement
– 18 February 2023, Update 11, Time to Act!
– 11 January 2023, Update 10, The GLO outcome, which claim to join and FOS news
– 30 July 2022, Update 9, Report on 19 July 2022 Woodford Webinar
– 15 June 2022, Update 8, ShareSoc issue Press Release re GLO and webinar
– 21 October 2021, Update 7, Leigh Day Launch proceedings
– 30 September 2021, Webinar Woodford what happens next? CLICK HERE TO WATCH THE RECORDING OF THE WEBINAR
- CLICK HERE TO READ THE WEBINAR REPORT
- CLICK HERE TO READ JEFF PRESTRIDGE’S ARTICLE FOLLOWING THE WEBINAR
– 10 July 2021, Update 6, Woodford Campaign Update
– 19 May 2021, Update 5, Woodford Campaign Update
– 9 March 2021, ShareSoc/Mello Event – The Woodford Debacle
– 8 March 2021, Update 4, Woodford Webinar, LBA and other news
– 21 Feb 2021, Update 3, Campaign news re Woodford press coverage and 9th March Webinar
– 31 Jan 2021, Update 2, Campaign Update Jan 2021
– 19 Nov 2020, Update 1 – ShareSoc launches Woodford Campaign
– 17 Dec 2020 – ShareSoc webinar to introduce the Campaign and Claim
A Note of Caution
Nothing in this campaign (including any endorsement of specific third-party initiatives) constitutes an accusation or assumption of guilt on the part of any person or persons. ShareSoc is not a party to any legal action.
Subsequent to (and independent of) our decision to endorse the Leigh Day claim, ShareSoc entered into a cooperation agreement with Leigh Day under which ShareSoc provided certain campaign-related services in return for which it received a monthly stipend.
Investors must review the information available and reach their own decisions with regard to any course of action.
The Leigh Day Group Claim Against Link Fund Solutions Limited
ShareSoc has followed the development of five legal redress initiatives relating to Woodford funds. In November 2020, after careful due diligence, we elected to endorse the action proposed by Leigh Day, a leading litigation firm. Leigh Day closed its claim to new claimants at the end of February 2023 and, consequently, ShareSoc has now withdrawn its endorsement.
The Leigh Day claim is on behalf of individuals who invested in the Woodford Equity Income Fund (“WEIF”). WEIF was suspended in June 2019, and its winding-up was announced in October 2019.
Leigh Day’s investigations have led it to believe that Link allowed WEIF to hold excessive levels of illiquid or difficult-to-sell investments, and that this caused investors significant harm. They consider that Link breached the rules of the FCA Handbook and failed to properly carry out the management function of the Woodford Equity Income Fund.
Leigh Day accepted clients on a no-win-no-fee basis with each claimant’s contribution to the costs of the litigation being capped at no more than 30% (including VAT) of any compensation received. Leigh Day has secured the necessary funding and insurance.
No legal claims have been announced for investors in WIIF, WPCT or Hargreaves Lansdown’s MMFs.
Why ShareSoc Chose to Endorse the Leigh Day Claim
- the relevant Counsel’s opinion
- the status and reputation of the firm
- the fact that no payment is required from claimants
- the level of the cost cap
- the proposed distribution mechanism for distribution of any award.
We concluded that it was in the interest of individual investors to join the Leigh Day claim. We reviewed the situation in November 2022 and reaffirmed this view at the time. The endorsement has been withdrawn following Leigh Day’s decision not to accept further claimants.
Join the ShareSoc Woodford Campaign
To join the Woodford Campaign, please complete the form at the bottom of this page.
We would, of course, prefer that you join and support ShareSoc as a Full Member. We are currently offering Full membership for only £30 (normally £45 a year). CLICK HERE for the discount code, further details and joining instructions. If you prefer to join our campaign as an Associate (free) member, please scroll down and use the form at the bottom of this page.
If you wish to make a one-off voluntary contribution to support the activities of ShareSoc please go to this page of our website: Donations.
Campaign Members’ Forum
ShareSoc has set up an exclusive Forum for ShareSoc Woodford Campaign members to exchange views, as well as a ShareSoc Facebook Group which is quite active. Join our campaign to access and contribute to the forum.
Forum and Facebook discussions are moderated. Libelous comments, threats, and discussion of privileged matters will not be permitted. Critical opinions are of course to be expected, but we ask contributors to be polite and observe basic courtesies. Comments which fail these tests will be removed.
How to Assist in the Campaign
The ShareSoc Woodford Campaign is led by Cliff Weight. We urge anyone who would like to assist in the Campaign to get in touch initially via an email to info@ShareSoc.org noting any particular interests and skills you have.
Links to the latest media coverage are on the Woodford Forum https://www.sharesoc.org/forums/topic/latest-news/
- 2/10/21 Mail On Sunday – Woodford Investors face 3 year wait for payout
- 27/09/21 Daily Mail – Leigh Day launch their court claim
- 19/03/21 Investors’ Chronicle – Woodford’s comeback and its consequences
- 14/03/21 The Telegraph – Woodford administrator faces £100m claim from angry investors
- 09/03/21 Law.Com International – Clifford Chance Called In as Woodford Fund Embroiled in Mismanagement Claims
- 08/03/21 Portfolio Adviser – Woodford comeback ‘on the rocks’ after Jersey regulator refuses to be ‘back door’ for relaunch
- 05/03/21 Portfolio Adviser – Leigh Day takes first legal steps against Link over its role in Woodford saga
- 27/02/21 This Is Money – JEFF PRESTRIDGE: The investment industry’s silence on Neil Woodford’s mooted return is a disgrace
- 20/02/21 This is Money – Woodford may be a witness FOR investors as law firm prepares class action against Link Financial Services
- 16/02/21 FT Adviser – Gina Miller calls for independent Woodford investigation
- 16/02/21 Financial Times – Neil Woodford’s relaunch plan prompts calls for independent inquiry
- 07/02/21 This Is Money – Legal battle to win compensation for savers in Woodford’s flagship fund kicks off
- 04/11/20 The Telegraph – Woodford investors to go 1,000 days without justice as lawyers set out legal battle
- 24/10/20 This Is Money – We’re going to court, say lawyers in Neil Woodford payout fight (if you only click one link – click this one)
- 14/12/19 MailOnline – 300,000 ‘locked-in’ investors are told they’ve lost a fifth of their money
- 22/10/19 The Telegraph – Treasury told to review watchdog’s handling of Woodford saga
- 18/10/19 Financial Times – Angry investors count the cost of Woodford collapse
- 15/06/19 Independent – FCA boss Andrew Bailey admits failings in handling of Neil Woodford’s suspended £3.7bn fund